If the Firm Has Already Reached the Minimum Efficient Scale

question 86

Multiple Choice

If the firm has already reached the minimum efficient scale, then

• A) any additional output will not result in a lower long run average cost.
• B) any additional output will result in a lower long run average cost.
• C) additional output will result in a lower long run marginal cost.
• D) the firm is profit maximizing in the long run.

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Definitions:

Rent Controls

Government-imposed limitations on the amount landlords can charge for leasing a property.

Equilibrium Price

The price at which the quantity of a good demanded equals the quantity supplied.

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded.

Price Ceiling

A legal maximum price that can be charged for a good or service, beyond which it cannot be sold.