Question

If a firm faces a​ high-demand period​ (a peak-period) followed by a​ low-demand period​ (an off-peak​ period), the​ firm's capacity depends on

A.

the​ high-demand period and not the​ low-demand period.

B.

the sum of the​ high-demand plus the​ low-demand.

C.

the​ low-demand period and not the​ high-demand period.

D.

the difference between the​ high-demand and​ low-demand.

Answer 1

Ans:- A) The high demand period and not the low demand period.

Explanation:- A companies or firm's capacity depends on its capacity to produce the maximum level of output or it's maximum level of services in a specific time limit. Firm's capacity includes it's workers, it's manufacturing process, mechionery etc. Capacity depend on the quantity of products or services at a specific period of time, it determine the high demand period. So firm's capacity depends on the high demand period.