Refer to the Diagram Given Below

question 34

Multiple Choice

Refer to the diagram given below.The diagram has two panels: (a) and (b) . Panel (a) represents the demand for and the supply of a brand of automobile (Turbo car) for Fancy Auto, a car manufacturing company.Assume that DL represents the demand for Turbo cars when demand is low, DM represents the demand for Turbo cars when demand is medium, and DH represents the demand for Turbo cars when demand is high.If Fancy Auto's optimal output level is 900 cars per week and the price of Turbo cars is flexible, Fancy Auto:

• A)can continue to sell its optimal output regardless of the demand level.
• B)can produce at its optimal output level only if the level of demand is D_L.
• C)can produce at its optimal output level only if the level of demand is at D_M.
• D)can sell more than its optimal output when the level of demand is D_H.

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Definitions:

General Partner

An owner of a partnership who is actively involved in its management and has unlimited personal liability for the business debts.

Business Management

The activities associated with running a company, such as planning, organizing, directing, and controlling, to achieve business objectives.

Borrowing Money

Borrowing money involves obtaining funds from another party with the promise to repay the principal amount along with interest or other financial charges.

Equipment

The set of tools, machinery, and other physical devices necessary for the production of goods or the provision of services.