If a firm has reached the minimum efficient scale, any additional output produced by the firm will result in a lower average cost in the long run.

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Once a firm has reached its minimum efficient scale, producing more output will lead to increasing returns to scale, which will result in lower long run average costs in the short run. However, this is only true up to a certain point known as the optimal output level. After that point, the firm will experience diminishing returns to scale, and the average cost will start increasing again.

If a Firm Has Reached the Minimum Efficient Scale, Any