The income effect causes quantity demanded to when the price of a normal good decreases, and causes quantity demanded to when the price of an inferior good decreases.

a. increase; increase

b. decrease; increase

c. increase; decrease

d. decrease; decrease

The purpose of safety stock is to: a. eliminate the possibility of a stockout. b. control the likelihood of a stockout due to variable demand and/or lead time. c. eliminate the likelihood of a stockout due to erroneous inventory tally. d. protect the firm from a sudden decrease in demand. e. replace failed units with good ones.