The efficient scale of production is the quantity of output that minimizes ?
Correct answer: B. average total cost
- A. average fixed cost
- B. average total cost
- C. average variable cost
- D. marginal cost
Explanation
The efficient scale is the output level at which average total cost reaches its minimum. Average fixed, average variable, and marginal cost are different measures and do not define efficient scale.
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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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