Multiple Choice QuestionExcess capacity is best described as underused plant resources that are a result of Blank______.Multiple choice question.a firm distinguishing its products through design, related services, quality, or pricean industry in which the top four firms are monopolistically competitivea concentration of industry competitiveness combined with an increase in market sharea firm producing less output than what is associated with achieving minimum average total cost
Question
Multiple Choice QuestionExcess capacity is best described as underused plant resources that are a result of Blank______.Multiple choice question.a firm distinguishing its products through design, related services, quality, or pricean industry in which the top four firms are monopolistically competitivea concentration of industry competitiveness combined with an increase in market sharea firm producing less output than what is associated with achieving minimum average total cost
Solution
The correct answer is:
d. a firm producing less output than what is associated with achieving minimum average total cost
Excess capacity refers to a situation where a firm is not producing at its optimal level, i.e., it is not achieving the minimum average total cost. This could be due to various reasons such as a decrease in demand, inefficiencies in production, etc. The other options do not directly relate to the concept of excess capacity.
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