Which of the following describes a facility with little excess capacity?

A facility with little excess capacity is characterized by being more efficient per unit of production. This is because such a facility operates at or near its designed capacity, which means that resources such as labor, equipment, and materials are utilized optimally to meet production demands. Since there is limited excess capacity, the facility is focused on maximizing output while minimizing waste and downtime, which enhances efficiency.

When a facility has little excess capacity, it is also less likely to take on additional production beyond its current capabilities. As a result, the focus shifts to improving processes and reducing costs associated with the production of each unit, which directly contributes to economies of scale and cost efficiency.

In contrast, facilities with higher excess capacity may experience inefficiencies, as they may have more workers or equipment than currently needed, leading to underutilization of resources. This underscores why operating with little excess capacity can drive improved per-unit efficiency in the production process.