Paper 1 · November 2020 · Capacity utilisation
How can a factory working well below capacity raise its capacity utilisation?
ABuy a second machine to add to the production line
BTake on subcontract work to fill the spare capacity
CCut the quantity the factory produces each week
DRaise the selling price of the goods it produces
Explanation
Capacity utilisation is actual output as a percentage of the plant's maximum output, so filling idle machine time with subcontract work for other firms raises it. Buying another machine adds capacity and lowers the percentage, and a higher price normally reduces the quantity sold.
Derived from ZIMSEC Business Studies Paper 1, November 2020, Q1