Answer to Question #299055 in Economics of Enterprise for Nandhu

Question

Consider the case in which the items are delivered at a constant rate e and the demand arrives at a constant rate d. For given d and changing c, when the ratio of Q/I reaches the maximum, and when does it reach the minimum? If you have the option to control c, do you want this ratio to reach the maximum or the minimum? Explain why?

Answer 1

The volume of purchased goods corresponds to the demand for goods. Therefore, with an increase in demand, respectively, the coefficient should be maximum and with a decrease in demand, minimum.