capacity utilization rate

capacity utilization rate definition - business

capacity utilization rate

The proportion of an economy's plant and equipment capacity that is being used to produce goods and services. A high capacity utilization rate is a characteristic of a strong economy, when manufacturers find it relatively easy to increase prices. A low capacity utilization rate is often accompanied by price cutting in an attempt to increase sales.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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