When a Firm Has Constrained Capacity as Opposed to Surplus

question 66

Multiple Choice

When a firm has constrained capacity as opposed to surplus capacity,opportunity costs will be:

• A)variable.
• B)greater.
• C)the same.
• D)lower.

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account that represents the amount of receivables a company does not expect to actually collect.

Accounts Receivable

Amounts due to a company from its customers or clients for services rendered or goods delivered, but not yet paid for.

Finance Charge

A fee representing the cost of credit or the cost of borrowing, typically detailed in the terms of a loan or credit agreement.

Accounts Receivable

Money owed to a business by its customers for products or services delivered or used but not yet paid for.