Which of the following would measure excess capacity?

Question

Quizplus · Accepted Answer

Excess capacity is the difference between what is being produced and economic capacity, which is the maximum output that can be produced with the given resources at the lowest possible cost. Option A measures the difference between the actual production and the level of production that maximizes profits, which may not necessarily represent economic capacity. Option C measures the difference between actual production and the level of production that minimizes short-run marginal cost, which is not the same as economic capacity. Option D measures the difference between the level of production that minimizes short-run average cost and economic capacity, but it does not directly measure excess capacity.

Which of the Following Would Measure Excess Capacity