Backroads Merchandise, a Manufacturer of Outdoors and Sports Products, Is

question 141

Multiple Choice

Backroads Merchandise, a manufacturer of outdoors and sports products, is facing a pronounced downturn in business due to lower priced goods from foreign competitors. Top management believes that this problem will be permanent or long-term, and it has decided to reduce the number of employees. The CEO has conferred with the director of HR to learn which method of reducing the workforce both the employees leaving and the employees remaining behind will receive better. The CEO also wishes to minimize the cost of the reduction process. Which of these methods has the director of HR probably suggested?

• A)voluntary separations with severance
• B)early retirement buyouts
• C)attrition and a hiring freeze
• D)layoffs

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Definitions:

Profit-Maximizing Level

The point at which a firm achieves the highest possible profit, typically where marginal costs equal marginal revenue.

Marginal Revenue

The additional income that a firm receives from selling one more unit of a good or service.

Demand Schedules

Tables that show the quantity of a good or service that consumers are willing and able to purchase at different price points.

Monopolistic Competitive Industry

A market structure where many firms sell products that are similar but not identical, allowing for competition based on factors other than price.