The Level of Production That Provides Complete Utilization of All

question 8

Multiple Choice

The level of production that provides complete utilization of all facilities and personnel,but allows for some idle capacity due to operating interruptions such as machinery breakdowns,idle time and other inescapable inefficiencies is:

• A)practical capacity.
• B)theoretical capacity.
• C)budgeted capacity.
• D)normal capacity.

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Definitions:

Substitute Goods

These are goods that can be used in place of one another, such that the increase in price of one leads to an increase in demand for the other.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price.

Demand

The desire and willingness of consumers to purchase goods or services at a given price level.

Supply

The total amount of a product or service that is available to consumers at a given price point and time.