the way a school can work with full capacity utilization.

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Chapter 5, Problem 1QFD

To determine

To analyze: the way a school can work with full capacity utilization.

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Explanation of Solution

Production Function: It refers to the technological relationship between the quantity of a good produced and the factors of production used for producing the goods.

Providing educational service requires academic as well as non-academic staff as labor, school building (land) and capital for running school.

A teacher can efficiently teach only a limited number of students, if the strength of the class is large then there will be some inefficiencies in handling a large number of students. This process is explained by using the production function theory.

The inefficiency arising from larger strength is shown with the help of production function diagram is as follows:

Essentials of Economics - Standalone book, Chapter 5, Problem 1QFD

In the above diagram, the number of students enrolled is shown along the vertical axis and the number of teachers employed is shown along the horizontal axis.

With the increase in the number of teachers employed, the number of student enrollment increases.

After the L’ unit of a teacher employed, the total product (number of student enrollment) starts falling after point A in the short run.

After point A, the ratio of the number of teachers employed and the number of students enrolled in school are not working with full efficiency.

To inhibit fuller capacity utilization, the school should operate at point A so the total product can maximize, and the school can inhibit fuller capacity utilization.

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