-In the above figure, at point d firms would find themselves with inventories ________ their target level and so they would ________ production.
A) increasing above; increase
B) increasing above; decrease
C) decreasing below; increase
D) decreasing below; decrease

Question

-In the above figure, at point d firms would find themselves with inventories ________ their target level and so they would ________ production.
A) increasing above; increase 
B) increasing above; decrease 
C) decreasing below; increase 
D) decreasing below; decrease

Quizplus · Accepted Answer

At point d, inventories are increasing above the target level, indicating excess supply. Firms would decrease production to bring inventories back to the target level.

-In the Above Figure, at Point D Firms Would Find