Answered: Which of the following are reasonable…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Transcribed Image Text:### Managing Excess Demand: Strategies and Considerations When facing excess demand, businesses need to choose the right strategies to manage the situation effectively. Below is a list of potential actions that can be taken. Consider each option carefully and select all strategies that apply: - **Increase Advertising** This involves boosting promotional efforts to enhance brand awareness and potentially attract more customers. - **Reduce Prices** Lowering prices can make products more attractive to consumers, potentially increasing sales volume. - **Reduce Advertising** Cutting back on advertising could lead to decreased demand, which might align more closely with production capabilities. - **Utilize All Available Capacity for Products with Highest Contribution Margin (CM)** This strategy focuses on optimizing production by prioritizing products that generate the most profit per unit of capacity. By examining these options, businesses can better align their operations with current demand scenarios and maximize efficiency and profitability.

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