If the long-run average cost curve is U-shaped,what is the optimal scale of production from society's viewpoint?

Question

Quizplus · Accepted Answer

The optimal scale of production from society's viewpoint is the minimum efficient scale, which is the output level where the long-run average cost is minimized. At this scale, the firm is operating at maximum efficiency, producing at the lowest possible cost, and can sell its products at a competitive price in the market. This benefits both the firm and society as a whole, as it leads to higher profits and lower prices for consumers. Therefore, option A is the best choice. Options B, C, and D are incorrect because they do not take into account the overall welfare of society and focus solely on the profitability of the firm.

If the Long-Run Average Cost Curve Is U-Shaped,what Is the Optimal