If planned spending exceeds the amount produced, how would a firm like John Deere satisfy an increased demand for tractors initially?
A) by drawing down tractor inventories
B) by increasing the production of tractors
C) by increasing the price for tractors
D) by waiting for demand to decrease
E) They will not be able to, and will lose sales.

Question

Quizplus · Accepted Answer

Drawing down tractor inventories allows a firm like John Deere to immediately satisfy increased demand without initially altering production rates or prices. This approach uses existing stock to meet demand while longer-term adjustments in production or pricing strategies are considered.

If Planned Spending Exceeds the Amount Produced, How Would a Firm