-Refer to the graph above to answer this question.Which of the following statements is correct? A)Q₁ must be the best output for a firm to produce. B)Q₂ must be the best output for a firm to produce. C)While it is possible for a firm to be too small,it could not be too large. D)While it is possible for a firm to be too large,it could not be too small. E)Firms that produce an output which is less than Q₁ cannot be achieving minimum efficient scale.

Question

Quizplus · Accepted Answer

Firms that produce an output less than Q1 cannot achieve minimum efficient scale because Q1 represents the minimum point on the long-run average cost curve, indicating the lowest cost per unit.

-Refer to the Graph Above to Answer This Question