What is the term for the situation where a firm's output is less than economic capacity?

Question

Quizplus · Accepted Answer

Excess capacity refers to the situation where a firm is producing less than its full potential or economic capacity. This means that the firm has unused or idle resources, such as machinery or equipment, that could be used to produce more output but are not being utilized. This can lead to inefficiencies and lower profits as fixed costs are spread over a smaller quantity of output.

What Is the Term for the Situation Where a Firm's