In case of an unexpected fall in turnover of a firm, who is producing a certain commodity, there will a situation of _________.
Choose the correct option.
Answer & explanation
Correct answer: option 2
Change in inventories may be planned or unplanned. In case of an unexpected fall in sales, the firm will have unsold stock of goods which it had not anticipated. Hence there will be unplanned accumulation of inventories. In the opposite case where there is unexpected rise in the sales there will be unplanned decumulation of inventories.