For the past 15 years the American public has wanted to buy big trucks. The Big Three automakers delivered, investing billions in plants that build gas guzzlers. Now, when customers walk into showrooms, gas mileage is on their mind. Retooling the industry will take years. Mike Quincy says the industry is "like a huge aircraft carrier. It doesn't stop on a dime. It doesn't turn on a dime." What does Mike mean?
A) The decision time frame to enter into the long run is very long in this industry.
B) The industry has increasing returns to scale.
C) Short run decisions are easily reversed.
D) The industry experiences diminishing marginal returns.

Question

Quizplus · Accepted Answer

The analogy of the industry being like a "huge aircraft carrier" suggests that changes in the industry take a long time to implement, indicating a long decision time frame to adapt to new market demands.

For the Past 15 Years the American Public Has Wanted