Firms that continue to produce when sales are temporarily low in an effort to avoid costly fluctuations in production are engaging in ________.
A)second degree price discrimination
B)stock out avoidance
C)work in progress
D)production smoothing

Question

Quizplus · Accepted Answer

Production smoothing refers to the strategy of maintaining a steady level of production even when sales are temporarily low. This helps to avoid costly fluctuations in production and the associated costs of starting and stopping production lines. The other options (A, B, and C) do not accurately describe this strategy.

Firms That Continue to Produce When Sales Are Temporarily Low