Question 1
If a firm's sales turn out to be ________, inventories will be higher than expected, and there will be less production in the future.
◦ more than expected
◦ less than expected
◦ as expected
◦ negative
Question 2
A firm that had no costs other than inventory costs will always aim to produce in a period the volume of goods necessary to make its stock of inventories at the end of the period equal to
◦ twice its sales.
◦ the optimal level.
◦ the stock at the beginning of the period.
◦ zero.