Minimum efficient scale is the level of output at which
A)short-run average total cost stops decreasing
B)short-run average total cost stops increasing
C)long-run average cost stops decreasing
D)long-run average cost stops increasing
E)profit stops increasing

Question

Quizplus · Accepted Answer

Minimum efficient scale refers to the level of output where long-run average cost stops decreasing. This means that beyond this point, further increases in output will not result in a significant decrease in per-unit costs. In other words, the firm is operating at its most efficient level of output.

Minimum Efficient Scale Is the Level of Output at Which