Question

Like many firms in the electronics industry, Godin Manufacturing experiences ups and downs in the demand for its high-tech products. To increase capacity during high-demand periods, management would do all of the following except:
A) change from one shift to two shifts a day.
B) lower the prices that customers pay.
C) open a new plant.
D) approve overtime for existing employees.
E) subcontract a portion of the work to other producers.

Answer 1

Answer:

The answer is B) "lower the prices that customers pay."

Explanation:

Actually, to increase capacity during high demands, the company do not need to lower the prices that customers pay but rather in crease the prices. According to law of demand and supply, the higher the demand, the more the price. Also, the company may also open another new branch for more production, approve overtime work and wages for employers, create more shifts and even subcontract part of the production to another company to ensure faster process but with same quality.