Minimum efficient scale is defined as
A) the lowest output level at which long-run average costs are at their minimum.
B) the amount of labor that maximizes the marginal product of labor.
C) the point at which marginal cost, average variable cost, and average fixed cost are all equal.
D) the point at which economies of scale are at their maximum.

Question

Quizplus · Accepted Answer

Minimum efficient scale is the lowest output level at which long-run average costs are at their minimum. It is the smallest level of production at which a firm can achieve the lowest long-term average cost per unit of output. Beyond the minimum efficient scale, the average cost per unit of output rises. Therefore, Option A is the correct choice.

Minimum Efficient Scale Is Defined as