The capacity of a firm can best be described as
A) when a firm is producing maximum output.
B) a firm's production when operating normal hours using a normal sized workforce.
C) when a firm makes full use of all the space available in its factory or building.
D) when all of the firm's workers are producing at their maximum potential.

Question

Quizplus · Accepted Answer

Capacity in a business context typically refers to the maximum amount of work that a firm is capable of completing in a given period under normal conditions. This includes considerations of normal working hours and a regular-sized workforce, rather than maximum output or space utilization.

The Capacity of a Firm Can Best Be Described as