-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC1), Plant 2 (ATC2), Plant 3 (ATC3), and Plant 4 (ATC4). Dustin's minimum efficient scale is
A) 4,000 copies per day.
B) 6,000 copies per day.
C) 2,650 copies per day.
D) More information is needed to determine the minimum efficient scale.

Question

-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC1), Plant 2 (ATC2), Plant 3 (ATC3), and Plant 4 (ATC4). Dustin's minimum efficient scale is
A) 4,000 copies per day. 
B) 6,000 copies per day. 
C) 2,650 copies per day. 
D) More information is needed to determine the minimum efficient scale.

Quizplus · Accepted Answer

The minimum efficient scale is the level of output at which the average total cost is minimized. In this case, it is at 4,000 copies per day where the average total cost is the lowest.

-Dustin's Copy Shop Can Use Four Alternative Plants