Which of the Following Statements Is True Regarding Excess Capacity

question 160

Multiple Choice

Which of the following statements is true regarding excess capacity?

• A) Firms usually have excess capacity when the demand for the product is very high.
• B) Excess capacity exists because the product is extremely useful and cheap but has no competitors.
• C) If the demand of a product falls, excess capacity declines.
• D) If the demand for a firm's product is stable, then excess capacity is likely to increase.
• E) Excess capacity can be a safety net if demand suddenly picks up.

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Definitions:

ATP Synthase

An enzyme that plays a key role in the process of cellular respiration, synthesizing ATP from ADP and inorganic phosphate during the process of oxidative phosphorylation.

Thylakoid Membrane

A membrane-bound compartment inside chloroplasts and cyanobacteria, involved in the light-dependent reactions of photosynthesis.

Stroma

The supportive tissue of an epithelial organ, tumor, gonad, etc., consisting of connective tissues and blood vessels.

Thylakoid Compartment

A membrane-bound compartment inside chloroplasts and cyanobacteria that is the site of the light-dependent reactions of photosynthesis.