Minimum Efficient Scale

question 215

Multiple Choice

Minimum efficient scale

• A) is the point at which economies of scale begin for a particular firm.
• B) is the lowest rate of output per unit of time at which long-run average costs reach a minimum for a particular firm.
• C) applies only to firms with U-shaped long-run average cost curves.
• D) is the point at which diseconomies of scale begin for a particular firm.

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Definitions:

Income Statement

A report showing the earnings, expenses, and net income of a business during a particular period, reflecting its financial performance.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in discounting to assess investment value.

Semiannual Interest

Interest that is calculated and paid twice a year, often associated with bonds or loans.

Effective Rate

The actual interest rate that a borrower pays or earns, taking into account the compounding of interest.