Agift shop sells little lentils—cuddly animal dolls stuffed with dried lentils—at a very steady pace of 10 per day, 310 days per year. the wholesale cost of the dolls is $5, and the gift shop uses an annual interest rate of 20 percent to compute holding costs. (a) if the shop wants to place an average of 20 replenishment orders per year, what order quantity should it use? (b) if the shop orders dolls in quantities of 100, what is the implied fixed order cost? (c) if the shop estimates the cost of placing a purchase order to be $10, what is the optimal order quantity?

1. all other things equal, according to the law of demand, when the price of a good falls, the demand for the good falls the demand for the good rises the quantity demanded of the good falls the quantity demanded of the good rises 2. when a market is in equilibrium, the quantity of the good that buyers are willing and able to buy exactly equals the quantity that sellers are willing and able to sell cannot be determined is less than the quantity that sellers are willing and able to sell is greater than the quantity that sellers are willing and able to sell 3. which of the following factors does not influence the demand for a good or service? consumer (buyer) income the price of related goods the number of sellers buyer expectations 4. when the number of sellers in a market increases, demand rises supply rises the price rises, all else equal the number of buyers falls