When a firm operates at the minimum efficient scale, there is still opportunity for it to further reduce its cost per unit through economies of scale.

Question

Quizplus · Accepted Answer

When a firm operates at the minimum efficient scale, the returns to scale are constant and the cost per unit cannot be reduced any further. Minimum efficient scale (MES) is the output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest-cost position that is achievable through economies of scale.

When a Firm Operates at the Minimum Efficient Scale, There