A Large Capacity Cushion Is Appropriate When

question 1

Multiple Choice

A large capacity cushion is appropriate when

• A) a make-to-stock process is used.
• B) a firm is attempting to capture market share in a growing industry.
• C) the market for its products or services is shrinking.
• D) a firm wants its capacity to match average demand.

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Definitions:

Protectionism

An economic policy of restricting imports from other countries through methods such as tariffs and quotas to protect domestic industries.

Frederic Bastiat

A French economist and writer known for his advocacy of free markets and his critique of protectionism.

World Trade Organization

An international body that oversees global trade rules between nations, aiming to ensure trade flows as smoothly, predictably, and freely as possible.

Multinational Corporations

Large companies that operate and have assets in several countries, allowing them to produce and sell goods and services across national borders.