It Is Important for a Firm to Know Its Minimum

question 144

Multiple Choice

It is important for a firm to know its minimum efficient scale of production because that is where

• A) it faces the least amount of competition.
• B) its tax burden will be lowest.
• C) long-run costs are minimized.
• D) long-run average total cost is greatest.
• E) it turns into a monopoly.

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Definitions:

Present Value

The present value of a sum of money or series of cash inflows expected in the future, calculated using a particular rate of return.

Ordinary General Annuity

An annuity where payments are made at the end of each period, such as monthly or annually, over a specified length of time.

Present Value

The contemporary worth of an expected future sum of money or flow of cash payments, accounting for a specific rate of return.

Periodic Interest Rate

The amount of interest charged or earned over a particular period of time, often expressed as a rate per month or quarter.