In the context of competitive markets, which of the following is an example of an operational plan?

• A. A central bank's policy to adjust interest rates
• B. A firm's decision to increase production in response to higher market demand
• C. A firm's long-term strategy to enter a new market
• D. A government's decision to impose a price ceiling on a good

Answer: (B)

Verified step by step guidance

1. Understand the concept of an operational plan: it refers to short-term, day-to-day decisions and actions a firm takes to manage its current operations effectively.
2. Identify the nature of each option: determine whether it relates to short-term operational decisions, long-term strategic planning, or policy decisions by external entities.
3. Recognize that a central bank's policy to adjust interest rates is a macroeconomic policy decision, not an operational plan of a firm.
4. Note that a firm's long-term strategy to enter a new market is a strategic plan, which is broader and longer-term than an operational plan.
5. Conclude that a firm's decision to increase production in response to higher market demand is an operational plan because it involves immediate, practical adjustments to current operations.