The level of output at which most plant-level scale economies are exhausted is referred to as the minimum efficient scale of output.

Question

Quizplus · Accepted Answer

This statement is true. The minimum efficient scale of output is the level at which plant-level scale economies are fully realized and no further cost savings can be achieved by increasing output. It is the lowest point on the long-run average cost curve where the firm is able to produce efficiently and at the lowest cost per unit.

The Level of Output at Which Most Plant-Level Scale Economies