A manufacturing plant is designed to produce 2000 flat-screen TVs per day. But demand is higher than that. If the company tries to increase its production to 2500 TVs per day, the average costs will ________ because ________.
A) decrease; the plant becomes more efficient
B) stay the same; the plant becomes more efficient
C) decrease; the plant becomes inefficient
D) increase; the plant becomes more efficient
E) increase; the plant becomes inefficient

Question

Quizplus · Accepted Answer

Increasing production from 2000 to 2500 TVs per day requires the plant to operate at a higher capacity, which could lead to higher costs due to the need for additional resources, such as labor and materials. This could also lead to inefficiencies in the production process, further increasing costs. Therefore, the average costs are likely to increase, and the plant may become inefficient.

A Manufacturing Plant Is Designed to Produce 2000 Flat-Screen TVs