Table 6-8
Elegant Settings manufactures stainless steel cutlery. Table 7-8 shows the company's cost data.
-Refer to Table 6-8.What is the minimum efficient scale of production?

Question

Table 6-8
  Elegant Settings manufactures stainless steel cutlery. Table 7-8 shows the company's cost data.
-Refer to Table 6-8.What is the minimum efficient scale of production?

Quizplus · Accepted Answer

The minimum efficient scale of production is the point at which the average total cost of production is minimized. Looking at the table, we see that the average total cost is lowest when producing 300 units, at $4 per unit. Therefore, producing 300 units is the best choice for Elegant Settings in order to minimize costs and achieve maximum efficiency.

Table 6-8 Elegant Settings Manufactures Stainless Steel Cutlery. Table 7-8