The larger the minimum efficient scale of a plant relative to total global demand,_____________________________________.

Question

Quizplus · Accepted Answer

If the minimum efficient scale of a plant is larger relative to total global demand, it suggests that the plant is highly productive and can meet a significant portion of the demand on its own. Therefore, centralizing production in a single location or a limited number of locations would make sense as it would allow for economies of scale and cost savings. Decentralizing production in multiple locations would result in smaller plants that may not be as efficient or cost-effective.

The Larger the Minimum Efficient Scale of a Plant Relative