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:

Cognitive Functions

Cognitive functions refer to the mental processes by which individuals perceive, think, understand, and make decisions.

Cocktail Party Effect

The Cocktail Party Effect is the ability to focus one's attention on a single conversation in a noisy environment, filtering out other distractions.

Model Of Attention

Conceptual frameworks that describe how humans focus cognitive resources on specific stimuli while ignoring others.

Unattended Stream

Information or sensory input that is not actively being focused on or processed by the conscious mind.