If the minimum efficient scale in toaster production is 500, 000 units per year,

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The minimum efficient scale of production for toasters is 500,000 units per year. This means that the average cost of production will be lowest at this level of output. If the firm produces less than 500,000 units per year, they will not be able to take advantage of economies of scale and will have higher average costs. Therefore, producing 300,000 toasters will result in higher average costs than producing 500,000 toasters.

If the Minimum Efficient Scale in Toaster Production Is 500