If the minimum efficient scale in woodstove production is 200,000 units per year,_____

Question

Quizplus · Accepted Answer

The minimum efficient scale in woodstove production is 200,000 units per year, which means that economies of scale are achieved only if the production is at or above this level. Therefore, if the production is lower than 200,000 units per year, the long-run average cost of production will be higher. Thus, the long-run average cost of producing 50,000 stoves is greater than the average cost of producing 100,000 stoves.

If the Minimum Efficient Scale in Woodstove Production Is 200,000