A firm's efficient scale of production is the output at which its
A) marginal revenue is at a maximum.
B) marginal revenue equals marginal cost.
C) profit is maximised.
D) average total cost is at a minimum.
E) marginal cost is at a minimum.

Question

Quizplus · Accepted Answer

The efficient scale of production is the output level at which a firm can produce goods at the lowest possible average total cost. Therefore, D - when the average total cost is at a minimum - is the correct choice.

A Firm's Efficient Scale of Production Is the Output at Which