Shifting demand makes sense when the company has ______________________.
A) lots of space for inventory
B) low inventory carrying costs
C) equipment that is highly flexible with respect to production volume changes
D) high fixed costs and low variable costs
E) excess capacity

Question

Quizplus · Accepted Answer

Shifting demand refers to the ability of a company to adjust production or supply in response to changes in demand. This makes sense when the company has high fixed costs and low variable costs, as it allows them to spread their fixed costs over a larger volume of sales. This ultimately reduces their average cost per unit, making it possible to offer products at lower prices while still making a profit.

Shifting Demand Makes Sense When the Company Has ______________________