Answer: c. A machine should be calibrated closer to the lower spec limit than the upper spec limit if the cost of fixing output that is too high is greater than the cost of fixing output that is too low.
Step-by-step explanation:
If the cost of fixing output that is too high is greater than the cost of fixing output that is too low then it make sense to calibrate the machine closer to the lower spec limit.
This way if the machine produces less output than is required, it can be fixed at a lower cost than if the machine had been set to the upper spec and produces output that is too high.