If the firm has already reached the minimum efficient scale, then
A) any additional output will not result in a lower long run average cost.
B) any additional output will result in a lower long run average cost.
C) additional output will result in a lower long run marginal cost.
D) the firm is profit maximizing in the long run.

Question

Quizplus · Accepted Answer

Once a firm has reached the minimum efficient scale, any additional output will not result in a lower long run average cost because the firm is already producing at the point where it has minimized its average cost. Therefore, the firm will not be able to achieve economies of scale by producing more output.

If the Firm Has Already Reached the Minimum Efficient Scale