A change that increases the expected profit from holding a unit of product in inventory, ________ the expected marginal revenue curve and shifts it to the_______ .

Question

Quizplus · Accepted Answer

When the expected profit increases from holding a unit of product in inventory, it means that the marginal revenue from selling that unit of product has also increased. This would lead to an increase in the expected marginal revenue curve, and shift it to the right. Therefore, the correct choice is (D) increases; right.

A Change That Increases the Expected Profit from Holding a Unit