If a Firm Has Excess Capacity, It Means

question 155

Multiple Choice

If a firm has excess capacity, it means

• A)that the firm expends too much of its resources on advertising its product without seeing an appreciable increase in sales.
• B)that the firm is not producing its minimum efficient scale of output.
• C)that the firm's long-run average cost of producing a given quantity exceeds its short-run cost of producing that same quantity.
• D)that the firm's quantity supplied exceeds its quantity demanded.

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Definitions:

Theory X Manager

A management style characterized by the belief that employees inherently dislike work and must be closely supervised and coerced to achieve productivity.

Contract

Legally enforceable agreement between two or more parties regarding a specified act or thing.

Union Members

Individuals who belong to a labor union, an organization that represents workers in negotiations with employers regarding wages, benefits, and working conditions.

Disrupt Business

The act of challenging and changing traditional business practices and models through innovative strategies or technologies.