When firms incur unplanned inventories,they typically
A)build new plants.
B)call for more government spending.
C)hire more workers and increase production.
D)lay off workers and reduce production.

Question

Quizplus · Accepted Answer

When firms incur unplanned inventories, it means that they have more inventory than demand, which leads to increased storage costs and reduced profits. To avoid such a situation, firms usually lay off workers and reduce production to match the demand.

When Firms Incur Unplanned Inventories,they Typically