If factories are operating below full capacity,sales can increase without investment in fixed assets.However,beyond some sales level,new capacity must be added and additional investment in fixed assets must be made.

Question

Quizplus · Accepted Answer

When factories are operating below full capacity, they have spare capacity that can be utilized to produce more goods without the need for additional fixed assets. However, once sales levels exceed the available capacity, new capacity needs to be added, which requires additional investment in fixed assets. Therefore, the statement is true.

If Factories Are Operating Below Full Capacity,sales Can Increase Without