If a firm has excess capacity, it means
A) that the firm's long-run average cost of producing a given quantity exceeds its short-run cost of producing that same quantity.
B) that the firm's quantity supplied exceeds its quantity demanded.
C) that the firm expends too much of its resources on advertising its product without seeing an appreciable increase in sales.
D) that the firm is not producing its minimum efficient scale of output.
D
You might also like to view...
Last year, the unemployment rate was 4 percent and the inflation rate was 3 percent. If the natural rate of unemployment is 3 percent, how do you expect inflation to change?
What will be an ideal response?
Which of the following is a name for when a bank promises to lend funds to a borrower to pay off its commercial paper?
A) loan commitment B) standby letter of credit C) securitization D) loan sale