A firm can vary supply of product by controlling production capacity and inventory.

Question

Quizplus · Accepted Answer

A firm can control the supply of its product by adjusting its production capacity and managing inventory levels. By investing in more machinery, tools and labor, a firm can increase its production capacity and produce more units of its product. Similarly, by reducing production, a firm can limit its supply. Additionally, by managing inventory levels, a firm can ensure that it has enough products to meet demand without over-stocking, which can lead to excess costs.

A Firm Can Vary Supply of Product by Controlling Production