If a Firm Has No Excess Capacity, Which of the Following

question 99

Multiple Choice

If a firm has no excess capacity, which of the following is a sensible bidding strategy?

• A) Set a price to cover all costs.
• B) Base the bid on the incremental costs incurred because the job will contribute toward the company's profit.
• C) Base the bid solely on direct labor hours.
• D) Downplay the potential impact of competitors.
• E) Try to minimize the company's tax liability.

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Definitions:

Affordable Care Act

A comprehensive healthcare reform law enacted in 2010 aimed at providing more Americans with access to affordable health insurance, improving the quality of healthcare, and reducing healthcare spending in the U.S.

Federal Reserve

The central banking system of the United States, responsible for monetary policy and regulation of banks.

Economic Decision-Making

The process of choosing among alternatives to maximize benefits and minimize costs in the allocation of resources, often involving significant analysis and planning.

Social Security Taxes

Taxes collected from employees and employers to fund the Social Security program, which provides benefits for retired workers, disabled individuals, and survivors of deceased workers.