Which One of the Following Statements Concerning the Economic Order

question 17

Multiple Choice

Which one of the following statements concerning the economic order quantity (EOQ) model is TRUE?

• A)An increase in holding cost will increase the EOQ.
• B)A decrease in demand will increase the EOQ.
• C)A decrease in holding cost will increase the EOQ.
• D)None of the above is true.

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Definitions:

Perfectly Horizontal

Describes a line or curve on a graph that has a slope of zero, indicating no change.

Demand Curve

Illustrates the relationship between the price of a good or service and the quantity demanded by consumers, typically downward sloping.

Relatively Elastic

Describes a situation where a small change in price leads to a greater change in quantity demanded or supplied.

Inelastic

A description of a good's demand when consumers’ demand for it does not significantly change with a change in the good's price.