Firms would reduce output as a reaction to
A) unplanned inventory increases.
B) increased demand for output.
C) unplanned inventory reductions.
D) decreases in costs of resources.

Question

Quizplus · Accepted Answer

Firms would reduce output as a reaction to unplanned inventory increases because this indicates that products are not being sold as expected, leading to excess inventory. Reducing output helps align production with actual sales levels.

Firms Would Reduce Output as a Reaction to