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.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Microeconomics
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.
Practise Microeconomics
1,742 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Microeconomics questions
The firms long run output decision will be where ?
Holding all factors constant except one and increasing a variable factor is expected to lead to steadily decreased marginal product of that factor, this is an example of ?
In a competitive industry each buyer and seller ?
Decrease returns to scale means that _____ as ______?
A production is technique is technically efficient if ?
In marketing "USP" stands for ?