What is one reason why it is a bad idea for a company to have excess capacity?
A) Wastes raw materials
B) Increases customer dissatisfaction
C) Ties up money in extra machines
D) Decreases form utility
E) Slows delivery of product

Question

Quizplus · Accepted Answer

Excess capacity ties up money in extra machines, which can lead to higher fixed costs for the company. This can result in lower profits and less financial flexibility for the company.

What Is One Reason Why It Is a Bad Idea