Answer: (A) True
Explanation:
Yes, the given statement is true that the risk pooling is one of the type of strategy which basically helps in explaining about the demand variability and also decrease the aggregate demand variance in the market.
The main objective of the risk pooling is to maintain the inventory stock level and also avoiding the out of stock situation in the management.
By using the risk pooling strategy the various types of warehouse and companies are reduce the level of safety stock in the supply chain management and also transferring their risk to another organization such as insurance company.
Therefore, the given statement is true.
Answer:
a. The true cost of something in its cost of opportunity
Explanation:
Opportunity cost is the cost which is defined as the cost or expense of one item which is lost in order to get the opportunity to do or to consume something else. In simple words, it is the value or the cost of the next best available alternative.
So, when the person select to bought the textbooks through Chegg instead paying the higher price for the same books through the bookstore. Under this situation, the principle applies is the cost of something in its opportunity cost.
Answer:
The correct answer is the third statement which says to maximize profits, the firm should produce less than 500 units.
Explanation:
The quantity of output produced is 500 units.
The marginal cost of producing 500 units is $1.50.
The minimum average variable cost is $1.
The price of the product is $1.25.
The firm will be at equilibrium when the price is equal to marginal cost. To maximize profits firm should decrease output to the extent that marginal cost comes to $1.25. At that point, the firm will earn profits as average variable cost is lower than the price.
A cycle or series of cycles of economic expansion and contraction.
