In Which of the Following Situations Would the Minimum Efficient

question 80

Multiple Choice

In which of the following situations would the minimum efficient scale of operation provide little or no guidance regarding how many firms should serve the market to minimize production costs?

• A)When the LRAC curve slopes downward over the relevant range of output.
• B)When the LRAC curve hits its minimum point at a relatively low level of output and then increases and the demand for output is quite large.
• C)When the LRAC curve hits its minimum point at a relatively low level of output but then remains constant as the scale of operation is increased and the demand for output is quite large.
• D)When the LRAC curve initially increases and then decreases beyond some point.

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