# I can't figure out how capacity utilisation is worked out here

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#1
A firm’s capacity utilisation is 60%. Its capacity then increases by 20%. Its new capacity utilisation is:

A 40%.
B 50%.
C 75%.
D 80%.

The mark scheme says the answer is B. 50% and find figure out why.
To get 50% the only way possible I've tried is by doing this: 0.50x20% = 10 then 60% - 10 = 50%.
Is this right?
0
3 years ago
#2
The way I think about it is if they don't give you any actual figures for capacity just use 100 as their maximum capacity to make it simple so 60% of a 100 is 60 if their maximum capacity increased by 20% it's increased to 120. 60 there current capacity over 120 new maximum x 100 is 50%.😊
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