The Inventories as a Factor of Production Motive for Holding

question 83

Multiple Choice

The inventories as a factor of production motive for holding inventories suggests that:

• A) firms hold inventories in order to produce more output.
• B) when sales are low, firms produce more than they sell and put the extra goods in inventories.
• C) firms hold inventories to avoid paying wages to labor.
• D) when a product is only partly completed, its components are counted as part of the firm's inventory.

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Definitions:

Organization

A structured arrangement of people and resources designed to achieve a specific purpose or set of goals.

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An additional aim or intent beyond the primary goal, often adding value or context.

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