ALE topic 25

Using another business to undertake a part of the production process rather than within the business is called

When there is a short term excess capacity, below are the methods business could implement to improve capacity level except?

• Rationalization

• Switching to produce another product

• Labour contract based on hourly wages

• Keep high output level and store it up

Business operating with full capacity is desirable at all times.

• True

• False

When the current levels of demand are more than the full capacity output of a business is called...

What is the cause/ factor that lead to excess capacity in a business?

When capacity utilization is at a high rate, average fixed costs are usually...

• lower
• higher

• constant

• free

Apply the knowledge of capacity utilization to a cinema operation context.

Draw an emoji to represent your thoughts on this topic.