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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Definitions:

Variables

Variables are symbols or names that represent values or quantities in mathematical expressions, statistical models, and scientific experiments.

Axes

Lines or reference points used in graphs and diagrams to represent different variables.

Origin

The point where the axes of a two-variable graph meet.

Graph

A visual representation of data, functions, or relationships between two or more variables, usually depicted using axes to show variations across dimensions.