Chapter 14: Collective Bargaining and Labor Relations

True or False: The duty of fair representation mandated by the National Labor Relations Act (NLRA) requires that all bargaining unit members, whether union members or not, have equal access to and representation by the union in the grievance procedure.

True

True or False: At the strategic level, management makes basic choices such as whether to work with its union(s) or to devote its efforts to developing nonunion operations.

True

True or False: Because the United States does not have a strong history of deep, class-based divisions in society, the unionization rate and coverage are low when compared to those in Europe.

True

True or False: Corporate campaigns seek to put public, financial, or political pressure on employers during the organizing (and negotiating) process.

True

If an airline's employees decide to strike, there will be A) a loss of revenue thereby increasing the cost of the strike to management. B) no loss of revenue, since there are other airlines to choose from. C) no impact, since there is little demand for this service. D) significant numbers of replacement workers. E) little impact, as there is the availability to bus and train travel.

A) a loss of revenue thereby increasing the cost of the strike to management.

Compared to traditional labor relations, transformational labor relations are associated with A) lower productivity. B) greater control over workers. C) more shop-floor cooperation. D) higher costs. E) lower product quality.

C) more shop-floor cooperation.

As the fiscal officer for your company, you are required to deduct dues from all the employees as a result of a(n) A) union shop. B) agency shop. C) fair share provision. D) checkoff provision. E) closed shop.

D) checkoff provision.

A(n) ________ is likely to be part of a craft union. A) manager B) salesperson C) autoworker D) electrical worker E) flight attendant

D) electrical worker

Which of the following is an example of an employer unfair labor practice? A) Diego, the union representative, causes threats of bodily injury to employees. B) Karla, a supervisor, pretends to spy on union meetings. C) Chang, a union member, terminates an existing contract and strikes for a new one without informing the employer. D) Manu, a worker, causes the discharge of an employee who spoke out against a contract proposed by the union. E) Tamara, a nonunion employee, causes a member to include illegal provisions in a contract.

B) Karla, a supervisor, pretends to spy on union meetings.

Which of the following is a characteristic of an industrial union? A) All the members represent a particular occupation in an industry. B) It restricts the number of its members in order to maintain high wages. C) Membership is a result of working for a particular employer in the industry. D) The members change employers more frequently than do members of craft unions. E) All the members share a specialized skill common across an industry.

C) Membership is a result of working for a particular employer in the industry.

Which of the following is true of union actions across industries and states? A) The employee groups and economic sectors with the fastest growth rates tend to have the highest rates of unionization. B) Women and men have equal representation in unions. C) One reason for the smaller union presence in southern states is the existence of right-to-work laws. D) Nonmanufacturing industries such as finance, insurance, and real estate have a higher union representation than manufacturing industries. E) The southern United States is more heavily organized than the rest of the country in terms of unionization.

C) One reason for the smaller union presence in southern states is the existence of right-to-work laws.

Toler is not sure if his union is a union shop or an agency shop. What would an agency shop do that a union shop would not? A) It would require a person to be a union member before being hired. B) It would require a person to join the union after a certain amount of time of employment. C) It would require an employer to deduct union dues from employees' paychecks. D) It would not require a membership but would require that dues be paid. E) It would prohibit an employer from deducting union dues from employees' paychecks.

D) It would not require a membership but would require that dues be paid.

Under which of the following acts is a union shop illegal? A) Landrum-Griffin Act B) Walsh-Healey Act C) Smith-Connally Act D) Taft-Hartley Act E) Norris-La Guardia Act

D) Taft-Hartley Act

According to John Dunlop, which of the following is required for an industrial relations system to be successful? A) The system must always translate acceptance into convergence of interests. B) The system should completely eliminate conflict. C) The system should be independent of the environmental context. D) The system should consist of participants that have a common ideology. E) The system should exclude mechanisms such as collective bargaining.

D) The system should consist of participants that have a common ideology.

When Pop Soda Distribution began discussion with the union, it was determined that it would be better to use ________ than have a strike. A) benchmarking B) delayering C) attitudinal structuring D) collective bargaining E) exempting

D) collective bargaining

The part of the labor-management negotiation process that focuses on dividing a fixed economic "pie" is known as A) attitudinal structuring. B) intraorganizational bargaining. C) collective bargaining. D) distributive bargaining. E) integrative bargaining.

D) distributive bargaining

In the labor-management negotiation process, the relationship and level of trust between the negotiators is known as A) attitudinal structuring. B) distributive structuring. C) integrative bargaining. D) intraorganizational bargaining. E) mediation

A) attitudinal structuring.

Be Well Inc. provides health insurance as being a member of the union but does not provide representation in collective bargaining because it is a(n) ________ union. A) arbitration B) associate C) corporate campaign D) distributive bargaining E) mediation

B) associate

When deciding on differences in pay, which employee is most likely to receive more pay for doing the same job? A) Carrie has increased skills. B) Samuel has had great performance reviews. C) Tomyra has strong moral character. D) Ursula has been with the company for 25 years. E) Harold has mastered all the machinery.

D) Ursula has been with the company for 25 years.

Compared to transformational labor relations, the traditional approach is likely to be associated with A) higher productivity. B) greater worker autonomy. C) more shop-floor cooperation. D) higher costs. E) better product quality.

D) higher costs.

Arbitrating the actual writing or setting of contract terms is called ________ arbitration. A) contract B) bracketed C) pendulum D) rights E) interest

E) interest

Arbitrating the enforcement or interpretation of contract terms is called ________ arbitration. A) contract B) bracketed C) pendulum D) rights E) interest

D) rights

Under the ________, states may pass so-called right-to-work laws. A) Landrum-Griffin Act B) Walsh-Healey Act C) Smith-Connally Act D) Taft-Hartley Act E) Norris-La Guardia Act

D) Taft-Hartley Act

Which of the following is true of the Wagner Act? A) Under the Wagner Act, states are allowed to pass right-to-work laws. B) It states that agency shops, union shops, and the maintenance of membership are illegal. C) It prohibits employees from going out on strike to secure better working conditions. D) It established an eight-hour workday, with additional pay for overtime work. E) It actively supports collective bargaining.

E) It actively supports collective bargaining.

The ________ was an addition to the Taft-Hartley Act that further regulated unions' actions and their internal affairs, such as financial disclosure and conduct of elections. A) Taylor Act B) Chamberlain-Ferris Act C) Keating-Owen Act D) Bagley-Keene Act E) Landrum-Griffin Act

E) Landrum-Griffin Act

True or False: Enforcement of the National Labor Relations Act (NLRA) rests with the American Arbitration Association.

False

True or False: Industrial relations systems ensure that acceptance always translates into convergence of interests.

False

True or False: If management voluntarily recognizes a union or if a union already represents employees, the focus is shifted from dealing with employees as individuals to dealing with them as a group.

True

True or False: In collective bargaining, an important element of power is the relative ability of each party to withstand a strike.

True

Once a union has been certified, the parties to the contract cannot bar an outside party from holding an election for A) more than 3 years. B) more than 4 years. C) at least 5 years. D) 1 year. E) 18 months.

A) more than 3 years.

________ seeks to exert public, financial, or political pressure on employers during the union-organizing process. A) Arbitration B) Checkoff provision C) Corporate campaign D) Integrative bargaining E) Mediation

C) Corporate campaign

Delice's Donuts' employees are part of the baker's union. The janitorial workers would also like to unionize. Management will not oppose this organizing attempt due to a ________ provision in the baker's contract. A) fair share B) union shop C) neutrality D) card-check E) checkoff

C) neutrality

Which of the following is an example of a union unfair labor practice? A) Alaina, a union member, is threatened by Tomer, her boss, with loss of benefits if she votes for a union. B) Juanita, an operations head, threatens to close down a plant if organized by a union. C) Gabriela, a new employee, refuses to join a union. D) Paolo, a nonunion employee, spies on union meetings. E) Ivan, a union representative, makes a contract that requires his employer to hire employees satisfactory to the union.

E) Ivan, a union representative, makes a contract that requires his employer to hire employees satisfactory to the union.

True or False: At the most general level, the National Labor Relations Board (NLRB) holds a union representation election if a minimum of 70 percent of employees in the bargaining unit sign authorization cards.

False

True or False: Europe and the United States compete to see what has more regulations and higher levels of union membership. Currently the United States is leading with more regulations and higher levels of union membership.

False

A major goal of labor unions is ________, because with it comes the power and influence to make the employees' voices heard and to effect changes in the workplace. A) bargaining effectiveness B) benchmarking C) attitudinal structuring D) legal support E) exempting

A) bargaining effectiveness

A(n) ________ typically reports on the reasons for a labor-management dispute and the views and arguments of both sides. A) mediator B) fact finder C) arbitrator D) shop steward E) associate union member

B) fact finder

Section 8(a)(3) of the National Labor Relations Act (NLRA) prohibits employers from A) retaliating against employees who are not part of unions. B) refusing to bargain in good faith with union representatives. C) firing employees for union organizing. D) interfering with union activities. E) declining proposals made by union representatives.

C) firing employees for union organizing.

Arnie is a shop steward for his union. He is responsible for ensuring the terms of the collective bargaining contract are enforced and A) being the lead in renegotiations. B) being a neutral party who assists in negotiations. C) representing employees in contract grievances. D) being the business representative. E) representing the management during conflict resolution

C) representing employees in contract grievances.

Which of the following is an example of a union unfair labor practice? A) Theodore refuses to reinstate workers when job openings occur because the workers participated in a lawful strike. B) Calvin, an operations head, threatens to close down a plant if organized by a union. C) Bulan, a new employee, refuses to join a union. D) Violetta, a nonunion employee, spies on union meetings. E) Jesse, a union head, forces an employer to stop doing business with another employer who refused to recognize the union.

E) Jesse, a union head, forces an employer to stop doing business with another employer who refused to recognize the union.

When an employee chooses to communicate a concern to management without necessarily leaving the company, he or she is following the ________ mechanism. A) checkoff B) closed shop C) withdrawal D) exit E) voice

E) voice

True or False: Under a neutrality provision, the employer pledges to oppose organizing attempts elsewhere in the company.

False

True or False: During distributive bargaining negotiations, management was successful at conceding on vacation increases, but the unions lost on wage supplements.

True

True or False: The union pay advantage causes employers to use less labor and more capital per worker than they would otherwise, which reduces efficiency across society.

True

According to John Dunlop, an effective industrial relations system A) provides a "web of rules" to help resolve conflict. B) involves participants with no common ideology. C) has no environmental context. D) eliminates conflict. E) does not use tools such as collective bargaining.

A) provides a "web of rules" to help resolve conflict.

Worker representation on advisory boards is mandated by law A) in the United States, but not in Europe. B) in some European countries, but not in the United States. C) in neither the United States nor in Europe. D) only in China and Japan. E) only in Australia.

B) in some European countries, but not in the United States.

In a collective bargaining contract, factors related to shift operations and hazardous work are typically covered under the ________ provision. A) wage determination B) job or income security C) special groups D) plant operations E) paid and unpaid leave

D) plant operations

At the ________ level, management and unions meet head-on over the issue of union organizing. A) administrative B) functional C) strategic D) workplace E) implementation

C) strategic

A(n) ________ is likely to be a part of an industrial union? A) carpenter B) electrical worker C) painter D) shoemaker E) steelworker

E) steelworker

Most national unions are composed of multiple local units and are affiliated with the A) American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). B) National Union of Government Employees. C) Public Works and Public Service Workers Trade Union. D) American Federation of Government Employees. E) Service Employees International Union.

A) American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).

Which of the following is a mediator? A) Carlito has no formal authority but, rather, acts as a facilitator and go-between in negotiations. B) Renee provides inside information about the employees to the management. C) Sonro provides a solution that is binding on the parties. D) Kylie is responsible for ensuring that the terms of the collective bargaining contract are enforced. E) Valente represents the management during the collective bargaining procedure.

A) Carlito has no formal authority but, rather, acts as a facilitator and go-between in negotiations.

Which of the following is true of nonunion employers? A) For nonunion employers, union avoidance is an important employee relations objective. B) Top management's values in nonunion organizations do not emphasize promotion from within. C) Nonunion employers tend to give below-average pay and minimal benefits. D) Nonunion employers can provide a stronger platform for the independent employee voice than that a union can provide. E) Nonunion employers who desire productivity advantage over their competitors cannot offer what unions can offer employees.

A) For nonunion employers, union avoidance is an important employee relations objective.

Which of the following is a trend seen in union membership and coverage? A) In the United States, union membership and coverage are declining in the private sector. B) Codetermination is mandated by law in the United States. C) Union wage premium in the United States is substantially lower than in other advanced industrialized countries. D) The labor movement in the United States is broader than that in Western Europe. E) The weak history of deep, class-based divisions in the United States has contributed to its high unionization rate.

A) In the United States, union membership and coverage are declining in the private sector.

At orientation for new employees you remind them that their jobs are part of a union shop. What does that mean? A) It is a union security provision that requires a person to join the union within a certain amount of time after being hired. B) It is a union security provision that requires the payment of dues but not a membership. C) It is a union security provision that requires a person to be a union member before being hired. D) It is a union contract provision that requires an employer to deduct union dues from employees' paychecks. E) It is a union contract provision that prohibits a person from joining the union within 30 days of employment.

A) It is a union security provision that requires a person to join the union within a certain amount of time after being hired.

Which of the following is true of labor relations in the public sector? A) Much of the union growth in the public sector has been in the service industry. B) Union membership in the public sector has constantly declined since the 1960s. C) Executive Order 10988 prohibits collective bargaining by federal employees. D) The Civil Service Reform Act of 1978, Title VII, established the Federal Mediation Board. E) Strikes are legal at the federal level of the public sector in most states.

A) Much of the union growth in the public sector has been in the service industry.

The National Labor Relations Board's (NLRB's) two major functions are to conduct and certify representation elections and to A) prevent unfair labor practices. B) ensure passage of labor friendly federal laws. C) raise the minimum wage. D) ensure minimal management control over HR practices. E) guarantee the equal employment of men and women at all levels of the company.

A) prevent unfair labor practices.

Over half of all the unfair labor practice charges are filed against employers who A) refuse to bargain. B) retaliate against employees who have filed other charges. C) interfere with union activities. D) bribe union negotiators. E) fire employees for organizing unions.

A) refuse to bargain.

According to the model developed by Katz and Kochan, at which level does the management make basic choices such as whether to work with its unions or to devote its efforts to developing nonunion operations? A) strategic level B) corporate level C) functional level D) production level E) business unit level

A) strategic level

Which of the following is a union unfair labor practice? A) Kelly organized a committee to represent employees. B) Anita insisted that the contract allow employees to carry weapons. C) Freida announced a wage increase without consulting the representative. D) Jerome failed to bargain about the effects of closing a plant. E) Rahid refused to meet with the employee representative because the employees were on strike.

B) Anita insisted that the contract allow employees to carry weapons.

Which of the following is true of unionization? A) Unions have traditionally been stronger in rural workplaces that employ women and youth. B) Employers actively resist unionization in an attempt to control costs and maintain their flexibility. C) In the last couple of decades, union membership has consistently increased as a percentage of employment. D) Union membership is higher in the private sector than in the public sector. E) Competitive threats have contributed to decreased employer resistance to union organizing.

B) Employers actively resist unionization in an attempt to control costs and maintain their flexibility.

Which of the following is an example of an employer unfair labor practice? A) Katrina, the union head, expels members for crossing a picket line that is unlawful. B) Jelle, a manager, threatens to close down a plant if organized by a union. C) Wayne, a manager, prohibits mass picketing when nonstriking employees are physically barred from entering the plant. D) Gerardo, a union member, causes the discharge of an employee, Noah, who spoke out against a contract proposed by the union. E) Ila, an employee representative, tricks her employer by including illegal provisions in a contract.

B) Jelle, a manager, threatens to close down a plant if organized by a union.

Which of the following is the first step in a typical employee-initiated grievance procedure? A) The steward and management representative meet and discuss the grievance. B) The employee discusses the grievance verbally with the supervisor. C) The grievance is submitted to the production superintendent. D) The employee consults the industrial relations staff for resolution. E) The grievance is appealed to arbitration for a binding decision.

B) The employee discusses the grievance verbally with the supervisor.

Which of the following is true of transformational labor relations? A) It results in lower productivity than does the traditional approach. B) Workers have greater autonomy than in the traditional approach. C) There is less feedback than in the traditional approach. D) The product quality is lower than the quality observed in the traditional approach. E) The costs are greater than those involved in the traditional approach.

B) Workers have greater autonomy than in the traditional approach

Delilah and Everett were able to get pay raises and two extra vacation days as a result of negotiations, even though they are not members. They are free riders because they A) pay their dues but are not members of a union. B) benefit from union activities without belonging to a union. C) act as facilitators in the negotiation processes. D) are management's representatives in the contract grievance process. E) are neutral agents who assist in conflict resolution.

B) benefit from union activities without belonging to a union.

In a collective bargaining contract, factors related to hiring and transfer arrangements are typically covered under the ________ provision. A) wage determination B) job or income security C) special groups D) plant operations E) employee benefit plans

B) job or income security

Amalia joined her union, but now wants to get out. As shop steward, you tell her that she has to stay a member until the contract ends due to a A) checkoff provision. B) maintenance of membership provision. C) closed shop provision. D) union shop provision. E) right-to-work provision.

B) maintenance of membership provision

Associate union membership A) is linked to an employee's workplace. B) provides services, such as discounts on health and life insurance or credit cards. C) provides representation in collective bargaining. D) is free of charge. E) available at unionized companies

B) provides services, such as discounts on health and life insurance or credit cards.

Labor unions' major benefit to society is A) providing workers with more power than employers. B) the institutionalization of industrial conflict. C) providing unilateral control to management. D) ensuring absolute equality under federal law. E) issuing management rights clauses.

B) the institutionalization of industrial conflict.

The management of an organization is less able to afford a strike when A) the product is nonperishable. B) the organization is labor-intensive. C) replacement workers are scarce. D) the company has more than one production unit. E) the demand for its product is weak.

B) the organization is labor-intensive.

Which of the following is true of the functions performed by the National Labor Relations Board (NLRB)? A) Its functions are guided by a specific jurisdictional standard that is constant across industries. B) Its functions do not include conducting and certifying representation elections. C) It enforces the National Labor Relations Act, which is based on the commerce clause of the U.S. Constitution. D) In practice, its functions are limited to purely local firms that fall within its jurisdiction. E) It not only responds to requests for actions but also initiates actions.

C) It enforces the National Labor Relations Act, which is based on the commerce clause of the U.S. Constitution.

Which of the following is true of the National Labor Relations Board (NLRB)? A) It is composed of a nine-member board, the general counsel, and ten regional offices. B) Its functions do not include conducting and certifying representation elections. C) Its jurisdiction is limited to employers whose operations affect commerce generally. D) In practice, only purely local firms fall within its jurisdiction. E) It not only responds to requests for actions but also initiates actions.

C) Its jurisdiction is limited to employers whose operations affect commerce generally.

Which of the following is a trend seen in union membership and coverage? A) Union wage premium in the United States is substantially lower than in other advanced industrialized countries. B) Codetermination is mandated by law in the United States. C) The weak history of deep, class-based divisions in the United States has contributed to its low unionization rate. D) The labor movement in the United States is broader than that in Western Europe. E) In the United States, union membership and coverage are increasing in the private sector.

C) The weak history of deep, class-based divisions in the United States has contributed to its low unionization rate.

Why should the industrial relations system to adopt collective bargaining? A) Government involvement speeds up conflict resolution. B) Conflict resolution by the courts involves firsthand knowledge of the circumstances. C) Unilateral control by management often sacrifices workers' rights. D) The existing union considers a strike to be more effective than a discussion. E) The existing unions are not institutionalized.

C) Unilateral control by management often sacrifices workers' rights.

Which of the following is true of the Taft-Hartley Act? A) It impedes collective bargaining rather than supporting it. B) It prohibits union members from going out on strikes. C) It permits employers to spy on union meetings. D) It outlaws union operations that threaten an employee's life and job. E) It prohibits employees from refraining from taking part in union activities.

D) It outlaws union operations that threaten an employee's life and job.

Which of the following is the largest union and is not affiliated with the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)? A) Communications Workers of America B) American Federation of Government Employees C) International Association of Fire Fighters D) National Education Association E) American Federation of Teachers

D) National Education Association

A list of unfair labor practices was added to the National Labor Relations Act (NLRA) through the A) Wagner Act. B) Walsh-Healey Act. C) Smith-Connally Act. D) Taft-Hartley Act. E) Norris-La Guardia Act.

D) Taft-Hartley Act.

Which of the following is true of the National Labor Relations Board's (NLRB's) process regarding unfair labor practices? A) Unfair labor practice cases begin with the filing of a charge that is first investigated by the court. B) A charge must be filed within a year of the alleged unfair practice. C) If the NLRB finds the charge to have merit and issues a complaint, the grievance procedure is not available as an option. D) The NLRB has the authority to issue cease-and-desist orders to halt unfair labor practices. E) The NLRB reinforces a criminal statute that makes punitive damages available.

D) The NLRB has the authority to issue cease-and-desist orders to halt unfair labor practices.

Which of the following is true of local unions? A) The local of an industrial-based union typically covers a city or a region. B) In a craft-oriented union, the local corresponds to a single large facility or to a number of small facilities. C) Administration of the contract is beyond the powers of a local union. D) The bulk of day-to-day interaction between labor and management takes place at the local union level. E) Negotiations involved in collective bargaining are not handled at the local union level.

D) The bulk of day-to-day interaction between labor and management takes place at the local union level.

The National Labor Relations Act (NLRA) is also known as the A) Landrum-Griffin Act. B) Davis-Bacon Act. C) Healey Act. D) Wagner Act. E) Hartley Act.

D) Wagner Act.

The ________ mandates the duty of fair representation. A) Landrum-Griffin Act. B) Davis-Bacon Act. C) Healey Act. D) Wagner Act. E) Hartley Act.

D) Wagner Act.

Who can use mediation to facilitate negotiations? A) only the transportation industry B) only federal government employees C) only the private sector D) both the public and private sectors E) only the public sector

D) both the public and private sectors

Cliff works as an autoworker in a production unit and is a member of an industrial union. When the workload increases and he loses his work-life balance, he simply leaves the organization to work in another that has fewer demands. As a member of a union, Cliff follows the ________ mechanism. A) checkoff B) closed shop C) negotiation D) exit E) voice

D) exit

It is the start of negotiations and Soryrith needs to reserve a room for the meetings. It will be fine if she finds a small room, as there tend to be A) a set number of participants—6 form the union and 6 from management. B) only 4-5 people that can make any decisions. C) very few people that participate throughout the negotiation. D) more people in attendance at the beginning of negotiations. E) fewer people in attendance at the beginning of negotiations.

D) more people in attendance at the beginning of negotiations.

Much of the public-sector union growth has occurred in A) the technology industry. B) the supervisory level of manufacturing industries. C) federal government agencies. D) the service industry and among white-collar employees. E) the service industry and among blue-collar employees.

D) the service industry and among white-collar employees.

Which of the following sought to provide an environment conducive to collective bargaining? A) Occupational Safety and Health Act B) Fair Labor Standards Act C) Civil Rights Act D) Racketeer Influenced and Corrupt Organizations Act E) National Labor Relations Act

E) National Labor Relations Act

Which of the following is true of labor relations in the public sector? A) Union growth has been the lowest among white-collar employees. B) Union membership declined drastically since the 1960s. C) Executive Order 10988 prohibits collective bargaining by federal employees. D) The Civil Service Reform Act of 1978, Title VII, established the Federal Mediation Board. E) Strikes are illegal at the federal level and in most states.

E) Strikes are illegal at the federal level and in most states.

Which of the following is true of the National Labor Relations Board's (NLRB's) process regarding unfair labor practices? A) Unfair labor practice cases begin with the filing of a charge that is first investigated by the court. B) A charge must be filed within a year of the alleged unfair practice. C) If the NLRB finds the charge to have merit and issues a complaint, the grievance procedure is not available as an option. D) The NLRB reinforces a criminal statute that makes punitive damages available. E) The NLRB can order the reinstatement of employees, with or without back pay.

E) The NLRB can order the reinstatement of employees, with or without back pay

In a collective bargaining contract, factors related to profit sharing and stock purchase are typically covered under the ________ provision. A) wage determination B) job or income security C) special groups D) plant operations E) employee benefit plans

E) employee benefit plans

Under the National Labor Relations Act (NLRA), which of the following is the strongest union security arrangement, yet is illegal? A) the agency shop B) the checkoff provision C) the fair share provision D) the union shop E) the closed shop

E) the closed shop

The management of an organization is less able to afford a strike when A) the product is nonperishable. B) the organization is capital intensive. C) replacement workers are scarce. D) the company has more than one production unit. E) the demand for its product is strong.

E) the demand for its product is strong.