excess capacity

Popular Terms
Output volume at which marginal cost is less than the average cost and, hence, where it is possible to decrease average cost by increasing the output. Excess capacity may be measured by the amount of additional output that will reduce the average cost to a minimum.

Use 'excess capacity' in a Sentence

We had excess capacity and that meant a few things for us and I tried to explain it to the workers as clearly as possible.
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The excess capacity was focused on during the meeting as an opportunity to improve efficiency in our value added process.
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Through careful planning and staffing we are able to ensure that the equipment we use is never running at excess capacity.
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