A firm's minimum efficient scale occurs where the long-run average total cost curve reaches its minimum.

Question

Quizplus · Accepted Answer

This statement is true. Minimum efficient scale refers to the size of production at which a firm can produce goods or services at the lowest possible average total cost in the long run. This occurs where the long-run average total cost (LRATC) curve reaches its minimum point. At this point, the firm is producing at the optimal scale of production, which enables it to maximize its efficiency and minimize its costs.

A Firm's Minimum Efficient Scale Occurs Where the Long-Run Average