Which of the Following Questions Are Concerned with Capacity Utilization

question 188

Multiple Choice

Which of the following questions are concerned with capacity utilization decisions that must be made by operations management?

• A) How many automobiles do we produce?
• B) How much floor space do we devote to a particular product?
• C) How many tables does my restaurant need?
• D) How much office space does the accounting operation need?
• E) All of these choices

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Definitions:

Long Run

A period in economics during which all factors of production and costs are variable, allowing for full adjustment to changes.

Perfectly Elastic

Describes a situation where the quantity demanded or supplied changes by an unlimited amount in response to any change in price.

Competitive Firm

A business that operates in a market with many buyers and sellers, where the company does not have the market power to set prices.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers, typically downward sloping.