What Is True About a Minimum Efficient Scale

question 33

Multiple Choice

What is true about a minimum efficient scale?

• A) It shows the optimal quantity for a company to produce.
• B) It can be most efficiently maintained in large industries by increasing the production.
• C) It proves that the costs per unit decrease with increases in volume till they reach and then maintain the minimal level.
• D) It can be achieved by large industries during economic downturns because they can easily spread their fixed costs when demand declines.

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Definitions:

Vandalism Damage

Destruction or damage to property that is willfully or maliciously caused, which can result in financial loss for businesses or individuals.

Straight-Line Depreciation

A method of calculating the depreciation of an asset, which assumes the asset will lose an equal amount of value each year over its useful life.

Residual Value

The estimated value that an asset will realize upon its disposal at the end of its useful life, after depreciation.

Estimated Life

Estimated life is the expected duration or lifespan of an asset, often used in calculating depreciation.