Companies pursue survival as their major objective if they are plagued with ________.
A) legal prosecution
B) weak competition
C) static consumer wants
D) shareholder activism
E) overcapacity

Question

Quizplus · Accepted Answer

When companies are faced with overcapacity, which means they have more production capacity than demand for their products, they often pursue survival as their major objective. This is because they are struggling to generate enough revenue to cover their fixed costs, such as rent and salaries, and to remain profitable. In such circumstances, companies may need to cut costs, downsize their operations, or find new sources of revenue to stay afloat. Legal prosecution, weak competition, static consumer wants, and shareholder activism may also pose challenges for companies, but they are not necessarily indicative of a company pursuing survival as its primary objective.

Companies Pursue Survival as Their Major Objective If They Are