Capacity Is the Maximum Volume of Activity That a Company

question 53

Multiple Choice

Capacity is the maximum volume of activity that a company can sustain with available:

• A)Resources.
• B)Discretionary orders.
• C)Inventory.
• D)Employees.
• E)None of the above.

---

Definitions:

Marginal Product

The additional output generated by increasing one unit of a specific input, keeping other inputs constant.

Labor

The human effort, both physical and mental, used in the production of goods and services.

Average Product

The quantity of goods produced per unit of input, determined by dividing the overall output by the amount of input used.