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the capacity level is dependent upon the long term and is affected by it and not the short term. Capacity utilization is the target which according to Gatley is the second factor. Any change to this factor means a direct effect upon the price change. The last factor is about the price change and its relation to capacity utilization.
Both second and third factors can affect the price changes but the general shape of the price path will remain the same. There is no direct evidence about these generalizations and the total capacity utilization model says that changes in these factors do have a very high impact on price.
Defense of the Target Capacity Utilization is to be taken into account. The capacity utilization model says that capacity is typically an outside factor in these models. At the same time
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