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Excess capacity refers to a situation where a firm is not producing at its maximum potential output level.
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Underutilization: Underutilization occurs when resources are not being fully utilized, leading to excess capacity.
Economies of Scale: Economies of scale refer to cost advantages that firms can achieve by increasing their production levels.
Marginal Cost: Marginal cost is the additional cost incurred by producing one more unit of a good or service.