Exhibit 24-6 -Refer to Exhibit 24-6. Excess capacity refers to the distance between A)P₂ and P₁. B)Q₁ and point C. C)Q₂ and Q₁. D)P₃ and P₁. E)P₂ and point C.

Question

Quizplus · Accepted Answer

Excess capacity refers to the amount of productive capacity that is currently not being used. In the context of a diagram or exhibit, it would typically be represented by the difference between the current level of production and the maximum possible level of production without increasing fixed costs. Choice C describes a distance between two points that likely represent different levels of production, suggesting a gap that could be interpreted as excess capacity.

Exhibit 24-6 -Refer to Exhibit 24-6. Excess Capacity Refers to the Distance