Answer the Following Question(s)using the Information Below

question 35

Multiple Choice

Answer the following question(s) using the information below.
Furniture Inc.estimates the following number of mattress sales for the first four months of 2016:
Finished goods inventory at the end of December 2015 is 1,500 units.Target ending finished goods inventory is 30% of the next month's sales.
-How many mattresses need to be produced in the first quarter (January,February,March) of 2016?

• A)18,500 mattresses
• B)19,400 mattresses
• C)20,900 mattresses
• D)22,400 mattresses
• E)18,000 mattresses

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Definitions:

Indifference Curve

A graph representing combinations of goods among which a consumer is indifferent, showing trade-offs between two goods.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given budget and prices.

Substitution Effect

The substitution effect describes the change in consumption patterns due to a change in relative prices, leading consumers to substitute a product for a cheaper alternative.

Income Effect

The adjustment in demand for goods and services triggered by a change in consumers' discretionary income.