It Is Week 1 and There Are Currently 20 as in Stock.We

question 8

Multiple Choice

It is week 1 and there are currently 20 As in stock.We need 300 As at the start of week 5.If there are scheduled receipts planned for week 3 and week 4 of 120 As each and A has a lead time of 1 week,when and how large of an order should be placed to meet the requirement of 300 As?

• A)Week 1,300 As
• B)Week 1,40 As
• C)Week 5,40 As
• D)Week 4,40 As
• E)Week 4,300 As

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Definitions:

Excess Profit

Profit earned by a firm that exceeds the normal profit level, often due to monopolistic power or market inefficiencies.

Marginal Revenue

The additional income generated from selling one more unit of a good or service.

Monopolistic Competitor

A firm in a market structure where many companies sell products that are similar, but not identical, allowing for competition on factors other than price.

Marginal Revenue

The additional income received from selling one more unit of a good or service.