Capacity utilisation

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Question

Capacity utilisation

Options:

A . is a measure of the proportional of the existing capital stock used for current production.

B . rises as the economy moves into a recession, since firms must replace unemployed workers with some other resources to maintain production.

C . represents the percent of the labour force that is employed.

D . is usually near 100 percent.

Answer: Option A
Answer: (a)Capacity utilisation refers to the extent or level to which the productive capacity of a plant, firm, or country is used in generation of goods and services. Expressed usually as a percentage, it is computed by dividing the total capacity with the portion being utilized.

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