In economics A company that makes baseball caps is underutilizing its resources. What does this mean?

Underutilizing resources means that the company is not using its full capacity to produce Baseball caps, leading to inefficiencies. This could result from factors like insufficient labor, machinery not operating at optimal levels, or lower-than-expected demand. Consequently, the company may incur higher per-unit costs and miss out on potential profits by not maximizing production. Addressing this issue could involve increasing marketing efforts, optimizing production processes, or reducing prices to stimulate demand.