Refer to Figure 9.1 for the following questions.
Figure 9.1

-In Figure 9.1, if the economy is at point J, what will happen?
A)Inventories have fallen below their desired level and firms decrease production.
B)Inventories have fallen below their desired level and firms increase production.
C)Inventories have risen above their desired level and firms decrease production.
D)Inventories have risen above their desired level and firms increase production.

Question

Refer to Figure 9.1 for the following questions.
Figure 9.1
 
-In Figure 9.1, if the economy is at point J, what will happen?
A)Inventories have fallen below their desired level and firms decrease production. 
B)Inventories have fallen below their desired level and firms increase production. 
C)Inventories have risen above their desired level and firms decrease production. 
D)Inventories have risen above their desired level and firms increase production.

Quizplus · Accepted Answer

When inventories fall below their desired level, it indicates that demand is outpacing supply. To meet this increased demand and restore inventories to their desired level, firms typically increase production.

Refer to Figure 9.1 for the Following Questions