Idle Capacity
Unused production capacity; output below potential.
Formula
Idle Capacity (%) = ((Capacity − Actual Output) ÷ Capacity) × 100
Real World
During the COVID-19 lockdowns, airline fleets sat grounded — British Airways had planes idle for months, yet still incurred fixed costs like leasing fees and maintenance contracts.
Exam Focus
Show the numerical impact of idle capacity on fixed cost per unit — calculations demonstrating rising unit costs earn strong AO3 marks.
How well did you know this?