If a firm is not operating at the output necessary to achieve all scale economies, it has not achieved its ?
Correct answer: D. Minimum efficient scale
- A. Efficient scale
- B. Average efficient scale
- C. Maximum efficient scale
- D. Minimum efficient scale
Explanation
Minimum efficient scale is the smallest output at which a firm fully exploits economies of scale and reaches the minimum long-run average cost. Operating below it means those scale economies have not yet been achieved.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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