Question

multiple choice question
excess capacity is best described as underused plant resources that are a result of

a firm distinguishing its products through design, related services, quality, or price
a concentration of industry competitiveness combined with an increase in market share
an industry in which the top four firms are monopolistically competitive
a firm producing less output than what is associated with achieving minimum average total cost

Explanation:

Excess capacity occurs when a firm is not producing at the output level that minimizes average total cost. It represents under - utilized resources. The first option is about product differentiation, the second is about industry competitiveness and market share, the third is about the nature of firms in an industry, and they are not related to the cause of excess capacity. The fourth option correctly states that excess capacity is due to a firm producing less output than the level associated with minimum average total cost.

Answer:

a firm producing less output than what is associated with achieving minimum average total cost