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If promotion increases demand in self employment but production capacity does not increase what risk exists?

Answer and explanation

Correct answer: Customer dissatisfaction and quality decline

The direct answer is A: customer dissatisfaction and decline in quality. Promotion can increase orders, but production capacity means the time, workers, materials, equipment and processes needed to fulfil those orders. The reasoning is: advertising raises demand; unchanged capacity leaves too much work; delays, shortages or rushed production may follow; customers may receive late or poor-quality goods; trust and future sales can fall. Option A is correct because it identifies the likely business risk. Option B is wrong because promotion never guarantees profit: extra sales may bring extra costs and complaints. Option C is wrong because work does not complete automatically; more demand requires planning and labour. Option D is wrong because the risk increases when capacity is not prepared. The correct business habit is to estimate demand, check resources and expand capacity before making a large promise.

Related tags

PromotionCapacity-PlanningCustomer-Satisfaction

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