A firm operating at the level of MES has a serious cost disadvantage relative to any other firms that are already operating above the MES level for the industry.

Question

Quizplus · Accepted Answer

MES, or Minimum Efficient Scale, represents the lowest point at which a firm can produce its goods at a competitive cost. Operating at MES means the firm is efficient in its production. Firms operating above MES can also achieve lower average costs, but this does not inherently mean that a firm at MES has a serious cost disadvantage, as both are operating efficiently relative to their scale.

A Firm Operating at the Level of MES Has a Serious