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.

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Definitions:

Capital Gains

Capital gains are the profits realized from the sale of assets such as stocks, bonds, or real estate, which exceed the purchase price of these assets.

Stock Dividends

The payment of additional shares of a company to its existing shareholders instead of cash.

Stock Splits

A corporate action in which a company divides its existing stock into multiple shares to increase the liquidity of the shares, though the market capitalization remains the same.

Shareholder's Wealth

Shareholder's Wealth is the sum total of the capital value of a company's shares plus any retained earnings or losses. It represents the shareholders' stake in the company.