A firm experiencing capacity constraints may struggle to:

A firm experiencing capacity constraints is operating at or near its maximum production levels, meaning it cannot increase output without making significant changes to its production process. This limitation results in an inability to supply more of a good than it is physically able to, which directly correlates with option B.

When a firm is constrained by its capacity, it faces restrictions on how much product it can deliver to the market at any given time. This lack of flexibility can hinder the firm from responding to increased demand or expanding its market share. For instance, if there is a surge in consumer demand, a firm with capacity constraints cannot simply ramp up production to meet this demand, as it would require additional resources, time, or potentially expensive over-time labor.

In a competitive market, being unable to supply more of a product can lead to lost sales and customers turning to competitors who can fulfill their needs. Therefore, this understanding of capacity constraints is vital in microeconomic theory, as it affects pricing strategies, investment decisions, and overall market competitiveness.