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Capacity utilization or capacity utilisation is the extent to which a firm or nation employs its installed productive capacity (maximum output of a firm or nation). It is the relationship between output that is produced with the installed equipment, and the potential output which could be produced with it, if capacity was fully used. [ 1 ]
Productive capacity is the maximum possible output of an economy. According to the United Nations Conference on Trade and Development (UNCTAD), no agreed-upon definition of maximum output exists. UNCTAD itself proposes: "the productive resources , entrepreneurial capabilities and production linkages which together determine the capacity of a ...
In microeconomics, a production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB) is a graphical representation showing all the possible options of output for two that can be produced using all factors of production, where the given resources are fully and efficiently utilized per unit time.
Excess capacity: Under imperfect competition, the installed capacity of every firm is large but not fully used. Total output is, therefore, less than the output which is socially desirable. Since production capacity is not fully used, the resources lie idle. Therefore, the production under monopolistic competition is below the full capacity level.
Economics (/ ˌ ɛ k ə ˈ n ɒ m ɪ k s, ˌ iː k ə-/) [1] [2] is a social science that studies the production, distribution, and consumption of goods and services. [3] [4] Economics focuses on the behaviour and interactions of economic agents and how economies work.
Economic welfare is created in a production process, meaning all economic activities that aim directly or indirectly to satisfy human wants and needs. [3] The degree to which the needs are satisfied is often accepted as a measure of economic welfare. In production there are two features which explain increasing economic welfare.
The effects of fiscal policy can be limited by partial or full crowding out. When the government takes on spending projects, it limits the amount of resources available for the private sector to use. Full crowding out occurs in the extreme case when government spending simply replaces private sector output instead of adding additional output to ...
A high enough capacity in the capital goods sector expands in the long-run the nation's consumer-goods production capacity. This distinction between the two different types of goods was a clearer formulation of Marx's ideas in Das Kapital , and also helped people to better understand the extent of the trade off between the levels of immediate ...