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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.

Solution

Correct Option: 2

An unexpected fall in turnover means sales are less than planned. The unsold stock that the firm produced piles up without being anticipated. This is called unplanned accumulation of inventories, since the firm did not plan for this rise in stock.

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