The efficient scale of a firm is achieved when:
A)average variable cost is minimised
B)fixed costs are spread over the most units
C)marginal costs are at a minimum
D)average total costs are minimised

Question

Quizplus · Accepted Answer

The efficient scale of a firm is achieved when the average total costs are minimised. This means that the firm is producing at a level where the cost per unit is the lowest possible while still being able to cover all of its fixed and variable costs. At this level, the firm is also able to operate at its maximum potential, which will bring in the highest possible profits.

The Efficient Scale of a Firm Is Achieved When