All of the Following Options Are Available to a Firm

question 72

Multiple Choice

All of the following options are available to a firm when capacity exceeds demand except to

• A) lay off workers and shut down a portion of the facility.
• B) operate on a shorter work week.
• C) produce other goods or services.
• D) sell unused facilities.
• E) give away some of the products to selected customers.

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Definitions:

Flexible Budget

An adjustable budget that is sensitive to changes in levels of activity or the amount of volume.

Service Company

A service company is a business that earns revenue by providing intangible products or services, as opposed to selling physical goods.

Cost Formula

An equation used to predict costs at different levels of activity, incorporating fixed and variable cost components.

Wages and Salaries

The compensation paid to employees for their labor, including hourly wages and annual salaries.