When the size of the production is the most efficient:
A) total cost is at the minimum.
B) average cost is at the minimum.
C) marginal cost is at the minimum.
D) fixed cost is at the minimum.

Question

Quizplus · Accepted Answer

When the average cost is at the minimum, it means that the cost per unit of production is the lowest. This occurs when the production is at its most efficient point, where economies of scale are being fully realized. At this point, the total cost may not necessarily be at the minimum, as it depends on the level of output. Marginal cost is also not necessarily at the minimum, as it only refers to the cost of producing one additional unit. Fixed cost is not relevant to determining the efficiency of production.

When the Size of the Production Is the Most Efficient