The minimum efficient scale is
A)the level of output where diminishing returns have not set in yet.
B)the plant size that yields the most profit.
C)the smallest level of operation where long-run average costs are lowest.
D)the smallest output level where the firm finally reaches productive efficiency.

Question

Quizplus · Accepted Answer

The smallest level of operation where long-run average costs are lowest is called the minimum efficient scale. It is the level at which the firm achieves economies of scale and can produce goods and services at the lowest possible cost. This level of operation allows the firm to remain competitive in the market by offering lower prices or higher quality products than its competitors.

The Minimum Efficient Scale Is