Excess capacity leads to companies initiating an increase in price.

Name: Excess capacity leads to companies initiating an increase in price.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Excess capacity indicates that a company is producing goods or services beyond the demand, which typically leads to a decrease in price to encourage customers to purchase the excess inventory. Therefore, companies would not initiate an increase in price in response to excess capacity.

Excess Capacity Leads to Companies Initiating an Increase in Price