Final answer:
Storing goods can enhance their value by meeting demand but also incurs costs such as warehousing, risk of obsolescence, and damage. Money, although not a perfect store of value due to inflation, is less subject to these costs. Producers must weigh these considerations when planning long-term expansion.
Step-by-step explanation:
While storing goods can indeed increase the value of goods by having more inventory on hand to satisfy customer demand, there are also costs associated with storage. These costs include the expense of warehousing, potential damage to goods, and the risk of products becoming obsolete or going out of style. For example, a shoemaker storing shoes may find that those shoes decrease in value with each season as styles change, illustrating that not all goods serve well as a store of value. On the other hand, holding money provides a simpler way to store value, as its worth isn't diminished by changes in fashion or technology, although it may be affected by inflation, which reduces its buying power over time. However, for producers looking to expand production, the long-term perspective is important since immediate expansion can be costly and difficult, requiring time to build infrastructure, hire workers, and open new stores.