The Following Table Shows Capacity Requirements Data for Making Table

question 23

Multiple Choice

The following table shows capacity requirements data for making table tops. Which of the following is TRUE?

• A)Overtime is needed in day 1.
• B)Capacity exactly meets demand in day 5.
• C)All of the excess demand in days 4 and 5 can be shifted to day 3.
• D)New machines are needed.

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Definitions:

Short-Run Marginal Cost

The cost incurred by producing one more unit of a product or service in the short term, where some inputs are fixed.

Average Variable Cost

The cost per unit of output that varies with the level of production, excluding fixed costs.

Market Power

The ability of a firm or group of firms to manipulate the price of goods or services in the market, often due to lack of competition.

Marginal Revenue Curve

A graphical representation that shows the change in total revenue for each additional unit sold.