Mission Solar is a large manufacturer of solar panels in San Antonio. Mission So
ID: 1161367 • Letter: M
Question
Mission Solar is a large manufacturer of solar panels in San Antonio. Mission Solar also employs workers from neighboring towns like New Braunfels and Kyle which have fewer job opportunities. Recent industry reports indicate a sizeable increase in conumer solar power capacity in the last two years. With this? information, Mission Solar introduced new production technology to increase efficiency and lower costs at its San Antonio plant. Senior managers decided that they would increase production of solar panels by 20 percent in the coming year to meet the higher demand. They also felt that lower? costs, along with high expected? demand, would help them to improve profit margins. In? disagreement, the? firm's operations head is not as optimistic about the demand conditions. She proposes that the sales in the coming year may not be as high as the senior management is anticipating.??
Which of the statements weaken the? management's view that the new technology and higher demand would increase profit? margins?
A.
Mission? Solar's order intake for this year increased.
B.
Solar energy accounts for 10 percent of the? country's total power generation capacity.
C.
The high? start-up cost in this industry acts as an entry barrier to new firms.
D.
In a recent press? meeting, Mission Solar announced its intention of opening a new manufacturing unit abroad.
E.
Due to improving employment conditions in New? Braunfels, many workers in San Antonio moved back to their hometowns.
Explanation / Answer
Solution: Due to improving employment conditions in New? Braunfels, many workers in San Antonio moved back to their hometowns.
Explanation: There is a possibility that many workers who are working with San Antonio may decide to move back to their hometowns because of the improving employment conditions. If they move back the labor supply will reduce and consequently there will be increase in wage prices which would lead to higher cost of production and low revenue