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单词 excess capacity
释义
excess capacity

Economics
  • A situation in which a firm is producing less than the maximum it is capable of producing. A firm may hold excess capacity to meet random fluctuations in demand. Alternatively, the firm may have undertaken in the past fixed investment to meet a higher level of demand than it is currently facing. Excess capacity may also be a strategic choice: investment in capacity signals a credible commitment to raise output if a potential competitor chooses to enter the market. This is an example of strategic entry deterrence.


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