The minimum efficient scale of a firm is the
A)largest scale of production for which the marginal cost is at a minimum.
B)largest scale of production for which the long-run average total cost is at a minimum.
C)largest scale of production for which the long-run average variable cost is at a minimum.
D)smallest scale of production for which the long-run average total cost is at a minimum.
E)smallest scale of production for which the long-run average variable cost is at a minimum.

Question

Quizplus · Accepted Answer

The minimum efficient scale (MES) of a firm is the smallest scale of production at which the long-run average total cost (LRATC) is minimized. This is the point where the firm is most efficiently producing its goods or services, taking full advantage of economies of scale without suffering from diseconomies of scale.

The Minimum Efficient Scale of a Firm Is the