Under what circumstances might a firm be asked to accept a special order of its product for a reduced price?

Question

Quizplus · Accepted Answer

A firm may be asked to accept a special order of its product for a reduced price if the firm has excess capacity. By accepting a special order, the firm can increase its production and generate additional revenue from otherwise unused resources. However, if the plant is producing at maximum capacity, accepting a special order may not be feasible as the firm may not have the capacity to fulfill the order without incurring additional costs.

Under What Circumstances Might a Firm Be Asked to Accept