A Third Party Can Increase the Supply Chain Surplus by Aggregating

question 10

Multiple Choice

A third party can increase the supply chain surplus by aggregating demand across multiple firms and gaining production economies of scale that no single firm can on its own.This is called

• A)capacity aggregation.
• B)inventory aggregation.
• C)warehouse aggregation.
• D)relationship aggregation.

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Definitions:

Short-Run Equilibrium

The state in a market where supply equals demand within a limited time frame, before any long-term adjustments take place.

Long-Run Equilibrium

A state in which all factors of production and outputs are optimal, allowing for all economic agents to have no incentive to change their behavior.

MC

A term often short for Marginal Cost, which is the cost added by producing one additional unit of a product or service.

MR

Short for Marginal Revenue, which is the additional income earned by selling one more unit of a product or service.