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How Can Firms Constructively React to Overcapacity

Question 42

Multiple Choice

How can firms constructively react to overcapacity?


A) Firms can invest to modernize facilities and production facilities.
B) Firms can merge with firms that need addition capacity so that the capacity of the two firms balances out.
C) Firms can identify unproductive or underproductive assets and obtain the salvage value of those assets.
D) Firms can offshore or outsource to rid themselves of overcapacity.

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