If a Firm Has Excess Capacity, It Means

question 155

Multiple Choice

If a firm has excess capacity, it means

• A)that the firm expends too much of its resources on advertising its product without seeing an appreciable increase in sales.
• B)that the firm is not producing its minimum efficient scale of output.
• C)that the firm's long-run average cost of producing a given quantity exceeds its short-run cost of producing that same quantity.
• D)that the firm's quantity supplied exceeds its quantity demanded.

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Definitions:

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