Figure 7.11 Figure 7.11 illustrates the long-run average cost curve for a firm that produces picture frames.The graph also includes short-run average cost curves for three firm sizes: ATC a , ATC b and ATC c .
-Refer to Figure 7.11.At what rate of output is the minimum efficient scale of output reached?

Question

Figure 7.11  Figure 7.11 illustrates the long-run average cost curve for a firm that produces picture frames.The graph also includes short-run average cost curves for three firm sizes: ATC a , ATC b and ATC c .
-Refer to Figure 7.11.At what rate of output is the minimum efficient scale of output reached?

Quizplus · Accepted Answer

The minimum efficient scale of output is reached at 10,000 picture frames, which is the lowest point on the long-run average cost curve where the firm achieves economies of scale.

Figure 711 Figure 7