Excess capacity may exist because there is _____ demand for what a firm can produce or there's _____ competition.
A) high; too much
B) little; too little
C) high; no
D) little; too much
E) no; too little

Question

Quizplus · Accepted Answer

Excess capacity means the firm is not utilizing its full production capacity, this might be due to low demand or high competition as the customers are not choosing their product over others. Option D states that there is little demand for what a firm can produce or there's too much competition.

Excess Capacity May Exist Because There Is _____ Demand for What