All of the following statements are true of the minimum efficient scale except one.Which one?
A)All possible economies of scale have been exhausted.
B)The short-run average total cost curve's minimum point is equal to the long-run average cost curve's minimum point.
C)Any increase in the scale of operation will encounter either constant returns to scale or diseconomies of scale.
D)An increase in the output level will increase profit.

Question

Quizplus · Accepted Answer

The minimum efficient scale is the production level at which the firm achieves the lowest average total cost in the long run. While economies of scale may continue beyond this level, the firm has reached its most efficient point. However, an increase in output level does not guarantee an increase in profit as other factors, such as market demand and price, also affect profitability.

All of the Following Statements Are True of the Minimum