When a Company's Product Is Nontangible (A Service), Inventory Is

question 94

True/False

When a company's product is nontangible (a service), inventory is no longer a viable option.

---

Definitions:

Average Product

A metric that measures output per unit of a variable input, calculated by dividing total production by the quantity of the variable input.

Diminishing Marginal Returns

A principle stating that as additional units of a variable input are added to a fixed input, the additional output produced from each new unit decreases beyond a certain point.

Diminishing Marginal Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot increase forever and will eventually decrease.

Marginal Product

The additional output that is produced by adding one more unit of a certain input while holding other inputs constant.