Investing in a New Equipment,such as Flexible Manufacturing Systems That

question 78

True/False

Investing in a new equipment,such as flexible manufacturing systems that can be programmed to switch quickly from producing one product to producing another can decrease capacity as it would incur excess overhead costs.

---

Definitions:

Increase in Demand

A situation where the quantity of a good or service that consumers are willing and able to purchase at a particular price rises.

Marginal Revenue

The additional revenue that a firm gains when it sells one more unit of a product or service.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced.

Marginal Cost

The rise in production costs when one more unit of a product or service is produced.