Firms operating at 100% capacity
A) are common.
B) are the exception rather than the rule.
C) have no fixed costs.
D) have no variable costs.

Question

Quizplus · Accepted Answer

Firms operating at 100% capacity are the exception rather than the rule. Most firms operate below full capacity due to various factors such as market demand fluctuations, facility limitations, and labor constraints. It is unlikely that a firm would have no fixed or variable costs simply because they are operating at full capacity.

Firms Operating at 100% Capacity