The failure to produce enough to minimize average total cost is termed:
A)economic profits.
B)excess capacity.
C)advertising.
D)excess production.

Question

Quizplus · Accepted Answer

Excess capacity refers to the situation where a firm produces less than the output at which average total cost is minimized, leading to higher costs and lower profits. This can occur due to various factors such as lack of demand, market saturation, or inefficient production processes. The other options (A, C, and D) do not accurately describe this situation.

The Failure to Produce Enough to Minimize Average Total Cost