What Factor Was Primarily Responsible for the Excess in Production

question 70

Multiple Choice

What factor was primarily responsible for the excess in production capacity in the United States after World War II?

• A) The United States government raised the tariffs on most imports by 60%.
• B) Many firms from other nations shifted their production facilities to the United States.
• C) Domestic demand was at a historic low and resulted in excess capacity.
• D) The returning military after World War II increased the labor supply in the United States.
• E) The implementation of the Marshall Plan dampened the overseas demand.

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Definitions:

MRP

Marginal Resource Product, which measures the additional revenue generated by employing one more unit of a resource.

MRC

Marginal Revenue Cost, often used interchangeably with Marginal Cost, refers to the increase in cost associated with producing one additional unit of output.

Profitable

The condition of earning more revenue than the costs incurred, leading to a financial gain or profit for the individual or organization.

Innovation

The first commercially successful introduction of a new product, use of a new method of production, or creation of a new form of business organization.