Which of the Following Is Not an Assumption of the Economic

question 160

Multiple Choice

Which of the following is not an assumption of the economic order quantity model shown below? Q∗ =

• A)Demand is known,constant,and independent.
• B)Lead time is known and constant.
• C)Quantity discounts are not possible.
• D)Production and use can occur simultaneously.
• E)The only variable costs are setup cost and holding (or carrying)cost.

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Definitions:

Behavioral Assumptions

The hypotheses or beliefs about how individuals make economic decisions, often based on their psychological characteristics.

Economic Models

Simplified representations of complex economic processes, used to predict or analyze economic behaviors and outcomes.

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation.

National Debt

The net accumulation of federal budget deficits.