If a Firm Currently Operates at Less Than Full Capacity

question 72

Multiple Choice

If a firm currently operates at less than full capacity, it must increase existing plant and equipment only if:

• A)its total variable operating costs increase with an increase in sales.
• B)the unused capacity of its existing assets is not sufficient to support a forecasted increase in sales.
• C)the internally generated funds exceed the amount required to support the forecasted increase in sales.
• D)the addition of fixed assets in large, discrete units results in economies of scale that increase operating costs.
• E)fixed operating costs tend to decrease with higher sales.

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Definitions:

Podocyte Processes

Extensions of podocytes, cells in the kidney that wrap around capillaries of the glomerulus, playing a key role in the filtration of blood.

Juxtaglomerular Apparatus

A specialized structure in the kidney that regulates blood pressure and the filtration rate of the glomerulus.

Afferent Arteriole

The small artery that carries blood toward the nephrons in the kidney.

Juxtaglomerular Apparatus

The juxtaglomerular apparatus is a specialized structure in the kidney that plays a key role in regulating blood pressure and filtrate formation by managing the release of renin.