How do interest rates affect the optimal order quantity Q*? A) As int

How do interest rates affect the optimal order quantity Q*?

A) As interest rates increase, Q* increases until it reaches a maximum, after which any further
increase in interest causes a decline in Q*.
B) As interest rates decrease, Q* decreases.
C) As interest rates increase, Q* decreases.
D) None of the above

 

 

ANSWER

C

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