The figure below shows a family of cost curves for a firm. The subscripts 1, 2, and 3 for the SRATC curves refer to different plant sizes. FIGURE 8-3
-Refer to Figure 8-3. The minimum efficient scale is achieved by this firm at output level
A) Q₃.
B) Q₄.
C) Q₂.
D) Q₁.
E) Q5.

Question

The figure below shows a family of cost curves for a firm. The subscripts 1, 2, and 3 for the SRATC curves refer to different plant sizes.  FIGURE 8-3
-Refer to Figure 8-3. The minimum efficient scale is achieved by this firm at output level
A) Q₃. 
B) Q₄. 
C) Q₂. 
D) Q₁. 
E) Q5.

Quizplus · Accepted Answer

The minimum efficient scale is achieved by this firm at output level Q3 because at this output level, the average total cost curve is at its minimum point.

The Figure Below Shows a Family of Cost Curves for a Firm