Question: When production capacity is limited and it is possible to obtain additional customer orders, a firm must consider its opportunity costs to evaluate the profitability
“When production capacity is limited and it is possible to obtain additional customer orders, a firm must consider its opportunity costs to evaluate the profitability of these new orders.” Do you agree with this statement? If so, what are the opportunity costs in this context?
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Yes When capacity is fixed in the short run the firm may need to sacr... View full answer
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