Inventory Requires Considerable Investment for Most Manufacturers, Wholesalers, and Retailers

question 201

Multiple Choice

Inventory requires considerable investment for most manufacturers, wholesalers, and retailers. This problem is complicated by the fact that most goods are manufactured four to nine months before they are actually sold to consumers. Manufacturers that engage in this type of speculative production often need short-term financing to do all of the following except

• A) buy materials.
• B) pay wages.
• C) pay rent.
• D) buy equipment.
• E) buy supplies.

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Definitions:

Product

A good, idea, method, information, object, or service created as a result of a process and serves a need or satisfies a want.

Elastic Demand

A situation where the quantity demanded of a good or service significantly changes in response to a change in price.

Unitary Elastic

A situation where the percentage change in quantity demanded is equal to the percentage change in price, indicating a proportional relationship.

Video Games

Electronic games that involve user interaction with a user interface to generate visual feedback on a two- or three-dimensional video display device such as a TV screen, computer monitor, or handheld device.