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Kara's Kittens typically produces and sells at its optimal (lowest per-unit cost) level of 30 scratching posts per week. Kara's also maintains an inventory of 20 scratching posts. If prices are sticky and there is a positive demand shock this week resulting in demand for 40 scratching posts, we would expect Kara's to Multiple Choice sell the additional scratching posts out of its inventory and rebuild the inventory later when a negative demand shock occurs. permanently expand production to 40 scratching posts per week. raise prices on scratching posts. introduce a new line of scratching posts.

Kara's Kittens typically produces and sells at its optimal (lowest per-unit cost) level of 30 scratching posts per week. Kara's also maintains an inventory of 20 scratching posts. If prices are sticky and there is a positive demand shock this week resulting in demand for 40 scratching posts, we would expect Kara's to Multiple Choice sell the additional scratching posts out of its inventory and rebuild the inventory later when a negative demand shock occurs. permanently expand production to 40 scratching posts per week. raise prices on scratching posts. introduce a new line of scratching posts.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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G.105.

Kara's Kittens typically produces and sells at its optimal (lowest per-unit cost) level of 30 scratching posts per week. Kara's also maintains an inventory of 20 scratching posts. If prices are sticky and there is a positive demand shock this week resulting in demand for 40 scratching posts, we would expect Kara's to

Multiple Choice

sell the additional scratching posts out of its inventory and rebuild the inventory later when a negative demand shock occurs.

permanently expand production to 40 scratching posts per week.

raise prices on scratching posts.

introduce a new line of scratching posts. 

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