-Which of the following is not true of the firm in Figure 11-9?
A)It has excess capacity.
B)It produces at the minimum efficient scale of production.
C)It cannot earn an economic profit.
D)It is operating in the long run.
E)It has no fixed costs.

Question

-Which of the following is not true of the firm in Figure 11-9?
A)It has excess capacity. 
B)It produces at the minimum efficient scale of production. 
C)It cannot earn an economic profit. 
D)It is operating in the long run. 
E)It has no fixed costs.

Quizplus · Accepted Answer

In the long run, firms typically produce at the minimum efficient scale, but if a firm has excess capacity, it is not producing at this scale.

-Which of the Following Is Not True of the Firm