Using the data in Extract F, explain one implication of the level of capacity utilisation for the soft drinks manufacturer A, compared to B - Edexcel - A-Level Business - Question 2 - 2017 - Paper 2

Similarly, for Manufacturer B, the capacity utilisation is:

$\text{Capacity Utilisation for B} = \left( \frac{400,000}{500,000} \right) \times 100 = 80\%$

The analysis indicates that Manufacturer A has a capacity utilisation of 50%, whereas Manufacturer B operates at 80% capacity. This lower capacity utilisation for Manufacturer A implies that fixed costs are distributed over a smaller number of units produced, potentially resulting in higher average costs per unit. Therefore, Manufacturer A may face challenges in competitiveness, as higher costs could restrict its ability to price products effectively compared to Manufacturer B.