Why Is It Often Difficult to Match Capacity and Demand

question 8

Multiple Choice

Why is it often difficult to match capacity and demand?

• A)Capacity is expensive
• B)Determining capacity is difficult
• C)Capacity increases often come in large increments
• D)Forecasting capacity is difficult
• E)It is easy to match capacity and demand

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Definitions:

Rent Expense

the cost incurred by a company to utilize property or equipment for business operations, typically recognized over the lease term.

Income Before Taxes

An entity's earnings before tax is assessed, representing the profit generated from all operations before tax expenses.

Operating Revenues

Operating Revenues are the income earned from a company's core business operations, excluding non-operating income sources like investments.