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When a Firm's Demand Fluctuates Randomly

Question 50

Multiple Choice

When a firm's demand fluctuates randomly,


A) the profit- maximizing inventory is found where the expected marginal benefit exceeds the expected marginal cost.
B) managers cannot use marginal analysis to determine the optimal inventory.
C) no profit can be earned on the inventory.
D) the optimal inventory maximizes the profit of the inventory.

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