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:

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

With a capacity utilisation of 50%, manufacturer A is only using half of its potential output. This implies that the fixed costs are spread over fewer units, which results in higher average costs for each unit produced. This could affect pricing strategies and profitability compared to manufacturer B, which operates at a higher capacity utilisation of 80%.