Which of the Following Statements Is True About Minimum Efficient

question 30

Multiple Choice

Which of the following statements is true about minimum efficient scale of output?

• A)With lesser utilization of capital equipment, the chances of a firm realizing economies of scale increases.
• B)A plant must avoid operating at the minimum efficient scale of output to realize all major plant-level scale economies.
• C)When the minimum efficient scale of production is very low relative to global demand, it will be economical to manufacture a product at a single location.
• D)An advantage of a low minimum efficient scale is that it allows the firm to accommodate demands for local responsiveness.
• E)A low minimum efficient scale increases the risk of potentially adverse fluctuations in exchange rates.

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