What is the efficient scale of a firm?
A)the quantity of output that maximizes marginal product
B)the quantity of output that maximizes total revenue
C)the quantity of output that minimizes average total cost
D)the quantity of output that minimizes average variable cost

Question

Quizplus · Accepted Answer

The efficient scale of a firm is the quantity of output at which the firm reaches the lowest point on its average total cost (ATC) curve. This means that the firm is producing at the lowest average cost per unit of output, which allows it to maximize profits. Therefore, the correct answer is C, as it is the quantity of output that minimizes average total cost.

What Is the Efficient Scale of a Firm