Which of the Following Is True of Master-Budget Capacity Utilization

question 94

Multiple Choice

Which of the following is true of master-budget capacity utilization?

• A) It hides the amount of unused capacity.
• B) It represents the maximum units of production intended for current capacity.
• C) It provides the best cost estimate for benchmarking purposes.
• D) It is an average that provides no meaningful feedback to a firm's marketing manager for a particular year.

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Definitions:

Equilibrium Quantity

At the market equilibrium price, the amount of goods or services that are supplied matches the amount that is demanded.

Equilibrium Price

A pricing point in the market where the supply of goods meets the demand for those goods.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where supply equals demand in a market.

Equilibrium Price

The cost at which the amount of products offered matches the amount of products requested.