A Firm Has Excess Capacity If Its Output Is

question 317

Multiple Choice

A firm has excess capacity if its output is

• A) less than the quantity at which marginal cost is minimized.
• B) less than the quantity at which economic profit is maximized.
• C) less than the quantity at which average total cost is minimized.
• D) more than the quantity at which average total cost is minimized.

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Definitions:

Union Wages

The level of compensation agreed upon through collective bargaining between labor unions and employers, often resulting in higher wages and better benefits for union workers compared to their non-union counterparts.

Salary

A fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, for the services of an employee.

Labor-market Discrimination

Differences in pay, employment opportunities, or treatment between workers based on race, gender, age, religion, or other non-skill related factors.

Illegal

Actions or activities that are forbidden by law or statute.