The term minimum efficient scale means:
A)the output corresponding to the minimum point of the short run average total cost curve.
B)the total of all efficient points along the long-run average-cost curve.
C)diseconomies of scale.
D)the minimum point of the long-run average-cost curve,or the output level at which the cost per unit of output is the lowest.
E)the maximum point of the long-run average-cost curve,or the output level at which the cost per unit of output is the highest.

Question

Quizplus · Accepted Answer

Minimum efficient scale refers to the output level at which the cost per unit of output is the lowest, and this corresponds to the minimum point of the long-run average-cost curve. At this point, the firm is able to take advantage of economies of scale, producing at the optimal scale and achieving the lowest long-run average cost possible. Therefore, answer D) is the best choice.

The Term Minimum Efficient Scale Means