A service firm's yield can be raised by increasing capacity used or by decreasing price.

Question

Quizplus · Accepted Answer

Increasing capacity used can indeed raise a service firm's yield by serving more customers, but decreasing price typically reduces yield per service unless it leads to a proportionally higher increase in volume that compensates for the lower price. Yield management often involves adjusting prices upwards in response to higher demand to maximize revenue.

A Service Firm's Yield Can Be Raised by Increasing Capacity