The Existence of Plant Capacity

Johansen's (1968) definition of capacity describes the capacity of existing plant and equipment, where capacity is the maximum amount that can be produced per unit of time with existing plant and equipment, as long as the availability of variable factors of production is unrestricted. Two definitions of plant capacity are explicitly described. The weaker idea requires only that when some factors are limited and the others variable, the least upper bound of the output rate is finite. The stronger notion follows Johansen's definition, and also requires that the supremum is reached.