Final answer:
The statement equating the level of activity performance with the the term activity capacity is incorrect. While capacity relates to the maximum activity level, efficiency measures how well resources are used.
Step-by-step explanation:
The statement that the level of activity performance where the amount of activity capacity needed corresponds to the level of efficiency required is called the activity capacity is false.
In the context of business and operations management, activity capacity refers to the maximum level of activity - that is, production or service - that an organization can sustain with the current resources and conditions. Efficiency, on the other hand, as defined by the ratio of useful energy (work) to the input energy, is a measure of productivity and effective use of resources. So, while efficiency is about how well resources are used, capacity is about the volume of activity that can be supported.