In the short run,__________ limitations require choices among alternatives.
A)capacity
B)joint cost
C)split-off point
D)full cost

Question

Quizplus · Accepted Answer

Capacity limitations refer to the maximum amount of goods or services that a firm can produce within a given time period. In the short run, a firm may not be able to increase its capacity to meet demand. Therefore, it must choose among various alternatives to make the best use of its existing capacity. For example, a restaurant may have a limited number of tables and staff available on a given night, so the owner must decide whether to accept more reservations or turn people away. Similarly, a factory may have limited production capacity and must decide which products to prioritize based on demand and profitability.

In the Short Run,__________ Limitations Require Choices Among Alternatives