High School

Which of the following statements best supports the fact that even during a period of low demand in the U.S. automotive industry, excess capacity remained?

A. Suppliers in the automotive industry had low bargaining power.
B. Other American automakers of plug-in hybrid sports cars, like Fisker Automotive, filed for bankruptcy.
C. Complementary products and services like battery charging and service stations were pervasive.
D. GM and Chrysler, despite their bankruptcy, restructured instead of exiting the industry.

Answer :

Final answer:

The statement 'd. GM and Chrysler, despite their bankruptcy, restructured instead of exiting the industry' best supports the existence of excess capacity because these companies maintained production potential even amid financial difficulties.

Explanation:

The best statement to support the fact that excess capacity remained during a period of low demand in the U.S. automotive industry is d. GM and Chrysler, despite their bankruptcy, restructured instead of exiting the industry. This illustrates that, despite significant financial struggles and a decrease in consumer demand, these companies maintained their production capabilities rather than shutting down completely.

Their decision to restructure reflects a persistence of excess capacity, as they planned to return to full production once economic conditions improved. Other factors, such as low bargaining power of suppliers or the bankruptcy of alternative automakers like Fisker Automotive, while indicative of industry stress, do not directly address the issue of excess capacity as strongly as the restructuring efforts of major industry players.

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