During Recessions, Business Must

question 183

Multiple Choice

During recessions, business must

• A) cut per-unit production costs so they can cut the selling price and increase sales.
• B) reduce output levels to bring quantities supplied in line with the reduced quantity demanded.
• C) cut per-unit production costs and increase the selling price, and also increase output levels to bring quantities supplied in line with the expected quantity demanded.
• D) increase per-unit production costs so they can reduce sales even further, and also reduce demand to match the quantities supplied.
• E) cut per-unit production costs to reduce the selling price, and also reduce output levels to bring quantities supplied in line with the reduced quantity demanded.

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Definitions:

Operational Efficiency

The capability of an organization to deliver products or services to its customers in the most cost-effective manner while ensuring the quality of its product, service, and support.

Zero Defects

A quality management philosophy aiming for the elimination of defects through continuous improvement.

Internal and External Customers

Internal customers are employees or departments within an organization that depend on each other's work, while external customers are individuals or entities that purchase the company’s products or services.

Contingency Approach

A management theory that suggests the most appropriate organizational structure or management style is contingent upon the internal and external situation.