What Does the Term "Minimum Efficient Scale" Mean

question 10

Multiple Choice

What does the term "minimum efficient scale" mean?

• A)The smallest size a firm can be in order to minimize both short-run and long-run average costs.
• B)The smallest size a firm can be in order to minimize short-run marginal cost.
• C)The smallest size a firm can be in order to minimize short-run average cost.
• D)The smallest size a firm can be in order to minimize long-run marginal cost.
• E)The smallest size a firm can be in order to minimize both short-run and long-run marginal cost.

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Definitions:

Antitrust Laws

Laws designed to promote fair competition for the benefit of consumers and prevent monopolies or other situations that could restrict trade.

Competition

The rivalry between companies selling similar products and services with the goal of achieving revenue, profit, and market share growth.

Vertical Merger

A merger between two companies that operate at separate stages of the production process for a specific finished product.

Manufacturing Firm

A company engaged in the industrial process of producing goods through physical, chemical, or mechanical transformation of materials or components.