If a firm is able to produce the same amount of output even after reducing its labor workforce, this implies that the firm has
A) unplanned inventories.
B) excess capital.
C) excess labor.
D) planned inventories.

Question

Quizplus · Accepted Answer

The firm's ability to maintain output levels with fewer workers indicates that it previously had more labor than was necessary for its production processes, hence the term "excess labor."

If a Firm Is Able to Produce the Same Amount