Desired Level of the Capital Stock

question 38

Multiple Choice

Desired Level of the Capital Stock
-Consider the two graphs above.Suppose that final goods are assembled only when ordered and to satisfy the precise preferences of each consumer.This would ________ the desired level of inventories,as depicted in graph ________.

• A)increase;B
• B)increase;A
• C)decrease;B
• D)decrease;A

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Definitions:

Income Statements

A financial statement that shows a company’s revenues, expenses, and profits or losses over a specific period.

Wholesalers

Businesses that buy goods in bulk from manufacturers or distributors and then sell them in smaller quantities to retailers or other businesses.

Retailers

Businesses that sell goods or services directly to consumers.

FOB Shipping Point

A term used in shipping indicating that the buyer assumes ownership and the risk of loss of goods once the seller ships the product.