The first level of output at which the long run average cost are minimized is called ?
Correct answer: A. The Minimum Efficient Scale
- A. The Minimum Efficient Scale
- B. The Minimum External Scale
- C. The Maximum External Scale
- D. The Maximum Effective Scale
Explanation
The minimum efficient scale is the lowest output level at which long-run average cost is minimised, or has reached its lowest sustainable level. It marks the efficient scale of production.
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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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