Many industries are often plagued by overcapacity Firms simultaneously invest Many industries are…

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Many industries are often plagued by overcapacity Firms simultaneously invest
Many industries are often plagued by overcapacity: Firms simultaneously invest in capacity expansion, so that total capacity far exceeds demand. This happens not only in industries in which demand is highly volatile and unpredictable, but also in industries in which demand is fairly stable. What factors lead to overcapacity? Explain each briefly.

Many industries are often plagued by overcapacity Firms simultaneously invest

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