Minimum Efficient Scale Refers to the

question 26

Multiple Choice

Minimum efficient scale refers to the

• A)minimum size plant in any given industry.
• B)minimum point on the short-run average total cost curve.
• C)output level when economies of scale first set in.
• D)output level when diseconomies of scale first set in.
• E)lowest output level at which average total costs are minimized.

---

Definitions:

Bankrupt

A legal situation in which an individual or firm finds that it cannot make timely interest payments on money it has borrowed. In such cases, a bankruptcy judge can order the individual or firm to liquidate (turn into cash) its assets in order to pay lenders at least some portion of the amount they are owed.

Normal Profit

The minimum level of profit needed for a company to remain competitive in the market, typically considered a break-even point not including opportunity costs.

Production Technology

The methods, equipment, and software used in the creation of goods and services, emphasizing efficiency and effectiveness.

Business Organization

Refers to the structure and mechanisms through which a business operates and is governed, including sole proprietorships, partnerships, and corporations.