Which of the Following Statements Is True About Minimum Efficient

question 37

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 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 risks against potentially adverse fluctuations in exchange rates.

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