Suppose a New Legislation Is Introduced and Car Producers Have

question 80

Multiple Choice

Suppose a new legislation is introduced and car producers have to pay higher wages to their workers. What will be the effect on the car market?

• A) Price will decrease and quantity will decrease.
• B) Price will increase and quantity will increase.
• C) Price will decrease and quantity will increase.
• D) Price will increase and quantity will decrease.

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Definitions:

Inventory Level

The quantity of goods, materials, or products that are held by a company at a given time, used to meet demand without incurring excess or shortage.

Fixed Quantity Inventory

A replenishment strategy for inventory management where a constant quantity of an item is ordered whenever stock falls to a predetermined level.

Financial Aspect

The monetary considerations and implications involved in a decision, investment, or the overall financial health of an organization.

Generate Cash

The process of creating liquidity or cash flows through activities such as operations, financing, or investments.