The technique that estimates long-run costs and the minimum efficient scale by determining the scale of operation at which most firms in an industry are concentrated is called the:
A)engineering estimation technique.
B)statistical cost estimation technique.
C)survivor approach.
D)back-of-the-envelope approach.

Question

Quizplus · Accepted Answer

The survivor approach is the technique that estimates long-run costs and the minimum efficient scale by determining the scale of operation at which most firms in an industry are concentrated. It essentially involves observing the actual firms in the industry and determining at what point there are diminishing returns to scale or diseconomies of scale. Therefore, this is the best choice for the given question. The other options, such as engineering and statistical estimation techniques or back-of-the-envelope approaches, do not specifically focus on determining the minimum efficient scale based on industry concentration.

The Technique That Estimates Long-Run Costs and the Minimum Efficient