A-level Business Studies Lesson 22 (3.4.2 & 3)

Question 1

Labour productivity

Answer 1

A measure of the output per worker in a given time period

Question 2

Labour productivity formula

Answer 2

Output per period / number of employees per period

Question 3

Unit costs formula

Answer 3

Total cost / units of output

Question 4

Capacity

Answer 4

The maximum total level of output or production that a business can produce in a given time. A company producing at this level is said to be producing at full capacity.

Question 5

Capacity utilisation

Answer 5

The percentage of a firm’s total possible production level that is being reached. If a company is large enough to produce 100 units a week, but is actually producing 92 units, its capacity utilisation is 92%.