According to the empirical evidence,which of the following is most accurate concerning the relative importance of demand and supply in determining cyclical profitability?

Question

Quizplus · Accepted Answer

Empirical evidence suggests that fluctuations in producer supply have a greater impact on cyclical profitability compared to fluctuations in customer demand. This is because producers have greater control over their supply chain compared to the external factors influencing customer demand. In other words, producers can adjust their production levels in response to changes in demand, but they cannot control external factors such as global economic conditions or changes in consumer preferences. Therefore, the relative importance of supply fluctuations is higher than that of demand fluctuations in determining cyclical profitability.

According to the Empirical Evidence,which of the Following Is Most