Capacity
Maximum production level in period.
Formula
Capacity = Maximum possible output per time period
Real World
A Jaguar Land Rover factory in Solihull has a capacity of around 400 vehicles per day; if demand falls, the plant may run below this level, raising average fixed costs per car.
Exam Focus
Always state the time period when discussing capacity — examiners expect 'units per week/month' not just a raw number.
How well did you know this?