When a Firm Is Operating at Its Minimum Efficient Scale

question 34

Multiple Choice

When a firm is operating at its minimum efficient scale, its

• A)short-run average total cost of production is minimized
• B)long-run marginal cost of production is minimized
• C)long-run average cost of production is minimized
• D)long-run profit is maximized
• E)profit is at a maximum

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Definitions:

Production Budget

A plan that outlines the number of units that must be produced within a period to meet the expected sales and inventory levels.

Units Produced

Units produced quantify the number of complete units manufactured or produced during a specific time frame in a production process.

Budget

An accounting device used to plan and control resources of operational departments and divisions.

Static Budget

A fixed budget that does not change or adjust to variations in business activity levels throughout the budget period.