What Does Economic Order Quantity Do

question 93

Multiple Choice

What does economic order quantity do?

• A)minimizes the total costs of ordering and carrying inventory
• B)maximizes the stockout costs
• C)minimizes the costs of ordering
• D)maximizes the cost of carrying inventory

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Definitions:

Aggregate Demand Curve

A graphical representation that shows the relationship between the overall price level and the total demand for goods and services in an economy.

Short-run Aggregate Supply Curve

Illustrates the relationship between the overall price level and the total output of goods and services that firms in an economy are willing to produce, assuming some prices are sticky.

Money Supply Curve

A graphical representation showing the relationship between the quantity of money in the economy and the level of prices.

Inverse Relationship

A situation where two variables move in opposite directions, meaning when one variable increases, the other decreases, and vice versa.