Refer to the graphs above. Suppose a firm is currently producing 500 computers per week and charging a price of $1000. What happens to the firm's inventory of computers if there is a negative demand shock and prices are flexible?
A) The firm's inventories will not change
B) The firm's inventories will increase by 200 computers per week
C) The firm's inventories will decrease by 150 computers per week
D) The firm's inventories will increase by 350 computers per week

Question

Refer to the graphs above. Suppose a firm is currently producing 500 computers per week and charging a price of $1000. What happens to the firm's inventory of computers if there is a negative demand shock and prices are flexible?
A) The firm's inventories will not change 
B) The firm's inventories will increase by 200 computers per week 
C) The firm's inventories will decrease by 150 computers per week 
D) The firm's inventories will increase by 350 computers per week

Quizplus · Accepted Answer

The Answer of  Refer to the graphs above. Suppose a firm is currently producing 500 computers per week and charging a price of $1000. What happens to the firm's inventory of computers if there is a negative demand shock and prices are flexible?
A) The firm's inventories will not change 
B) The firm's inventories will increase by 200 computers per week 
C) The firm's inventories will decrease by 150 computers per week 
D) The firm's inventories will increase by 350 computers per week

Refer to the Graphs Above