Final answer:
Boosting the capacity of the bottleneck in production is referred to as increasing the aggregate supply. This can happen through hiring additional workers, enhancing technology, or improving efficiencies until reaching a stage of diminishing returns. Technology improvements lead to right-shifts in the supply curve and greater overall capacity.
Step-by-step explanation:
When a manager increases the capacity of the bottleneck, it is called increasing the aggregate supply. The process of increasing capacity often involves hiring more workers, improving technology, or enhancing the efficiency of production. In the context of business and economics, when a company finds that hiring additional workers increases output, it may continue to do so until it reaches a point of diminishing returns. At this stage, the total production slows down, indicating that further additions of workers lead to smaller increases in output.
Moreover, improvements in technology that reduce the cost of production or an improvement in the quality of the product can also lead to an increased aggregate supply. These changes generally result in a shift to the right in the supply curve, depicting an increase in capacity to produce a good or service. Similarly, an increase in demand can cause a surge in the quantity of aggregate supply, particularly if prices of outputs rise while input prices remain constant, motivating more labor and factory engagement in production.