What is the firm's efficient scale
A)the quantity of output that minimizes average total cost
B)the quantity of output that minimizes average fixed cost
C)the quantity of output that minimizes average variable cost
D)the quantity of output that minimizes marginal cost

Question

Quizplus · Accepted Answer

The efficient scale of a firm is the quantity of output that minimizes average total cost. This is the point at which the firm is able to produce each unit of output at the lowest possible cost, resulting in maximum efficiency. At any point below or above this level of output, the firm will experience either increasing average costs or decreasing returns to scale.

What Is the Firm's Efficient Scale