If an airport decides to expand by building an additional passenger terminal, and in doing so it lowers its average cost per airplane landing, it was previously operating at
A)minimum efficient scale.
B)more than minimum efficient scale.
C)less than minimum efficient scale.
D)minimum capacity.

Question

Quizplus · Accepted Answer

The airport was previously operating at less than minimum efficient scale because expanding and lowering average costs indicates that it was not fully utilizing its capacity efficiently before the expansion.

If an Airport Decides to Expand by Building an Additional