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Fixed supply and fluctuating demand lead to which of the following challenges a) lost revenue from...

Fixed supply and fluctuating demand lead to which of the following challenges

a) lost revenue from fixed supply

b) unpredictable expenses

c) lost revenue from excess demand

d) unpredictable opportunity costs

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Answer #1

The correct answer is

d) unpredictable opportunity cost

if the supply is fixed but the demand is unstable then sometimes there might be excess demand and the revenue which could have been generate it is lost, but sometimes there might be very little demand and those cases the cost might have to born to take the supply.

The other options are not correct because there can be lost revenue but there can also be the cost of spoilage of inventory. Fixed supply does not mean unpredictable expenses.

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