The maximum amount a process, machine, or system can produce.
Comments: If a machine is running “at capacity” it is going as fast as it can go and producing as much as it can produce.
If a machine is running “below capacity” it is able to do more than it is currently doing.
It is sometimes not necessary or desirable to run machines “at capacity.” Most cars will exceed 100 miles per hour but that excess capacity is typically not needed or advisable.