What does the term "minimum efficient scale" mean?

Question

Quizplus · Accepted Answer

Minimum efficient scale is the smallest size a firm can be in order to minimize both short-run and long-run average costs. This means that if a firm produces at a level below its minimum efficient scale, it will not be operating at its lowest possible cost, resulting in inefficiencies. Therefore, it is important for a firm to identify its minimum efficient scale in order to achieve cost efficiency and competitiveness in the market.

What Does the Term "Minimum Efficient Scale" Mean