What happens to the benefit-to-cost ratio when building to accommodate all demand?

When building to accommodate all demand, the benefit-to-cost ratio tends to decrease. This is because accommodating all demand often leads to overcapacity, where the resources and infrastructure exceed the actual demand. As a result, the costs of construction, maintenance, and operation may rise significantly compared to the actual benefits derived from the facility being used.

In scenarios of overcapacity, some infrastructure might not be fully utilized, leading to a situation where the costs outweigh the benefits derived from the usage. The investments made to accommodate excess demand—such as larger terminals, additional runways, or expanded parking—do not yield proportional benefits in terms of passenger throughput or service quality.

Balancing capacity with actual demand is crucial in optimizing the benefit-to-cost ratio. A facility that efficiently meets current needs while allowing for reasonable future growth can maintain a healthier ratio, ensuring that the benefits justify the costs incurred.