The Smallest Quantity of Output at Which Long-Run Average Cost

question 365

Multiple Choice

The smallest quantity of output at which long-run average cost is at a minimum is a firm's

• A) maximum efficient scale.
• B) profit-maximizing output point.
• C) minimum efficient scale.
• D) efficient output point.

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Definitions:

Cost of Goods Sold

The expenses directly tied to the manufacturing of the products a company sells, including labor and materials.

Accounts Payable

Represents the amount a company owes to its suppliers or creditors for goods and services received but not yet paid for.

Operating Activities

The day-to-day actions a company takes through its production, sales of goods, or provision of services, as reflected in its cash flow.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor expenses.