A service firm is underutilizing its labor,equipment and facilities when:
A) Demand exceeds maximum capacity
B) Demand exceeds optimum capacity
C) Supply and demand are balanced at the level of optimum capacity
D) Demand is below optimum capacity
E) Demand is below minimum capacity

Question

Quizplus · Accepted Answer

When demand is below optimum capacity, the service firm is not using its resources to their full potential and is underutilizing its labor, equipment, and facilities. This can result in inefficiency and lower profits for the firm.

A Service Firm Is Underutilizing Its Labor,equipment and Facilities When