Scenario 11.1 - Bubble and Squeak

question 12

Multiple Choice

Scenario 11.1 - Bubble and Squeak
The rising popularity of bubble and squeak as a breakfast item on the menu has resulted in a steady demand for peas.Over the course of the past week,457 patrons have ordered the hearty breakfast and each serving contains a half cup of English peas.It costs two cents to hold a half cup of peas in inventory for a year and $3 to place an order (remember they come all the way from England!) .It takes two weeks to ship a container from England loaded with peas.
-What is the average inventory if they order at the optimal order quantity?

• A)2670 cups
• B)2000 cups
• C)1335 cups
• D)667 cups

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Definitions:

Consumer Surplus

The discrepancy between what consumers are prepared and can afford to spend on a product or service versus what they end up paying.

Producer Surplus

The difference between the amount a producer is willing to accept for a good or service and the actual amount received when it is sold.

Economic Efficiency

The optimal allocation of resources to maximize productivity and meet consumer demand most effectively.

Credit Bureaus

Organizations that collect and maintain individual credit information, providing credit reports to lenders, employers, and others authorized to receive such information.