When a firm is operating at its minimum efficient scale, its

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When a firm is operating at its minimum efficient scale, its long-run average cost of production is minimized. This means that the firm is producing at the lowest possible cost per unit in the long run, indicating the optimal level of output that maximizes efficiency. The short-run average total cost may not be minimized, as the firm could still be experiencing economies or diseconomies of scale in the short run. The long-run marginal cost and long-run profit are not necessarily maximized at the minimum efficient scale.

When a Firm Is Operating at Its Minimum Efficient Scale