The Minimum Efficient Scale of a Firm

question 157

Multiple Choice

The minimum efficient scale of a firm

• A)is realized somewhere in the range of diseconomies of scale.
• B)occurs where marginal product becomes zero.
• C)is in the middle of the range of constant returns to scale.
• D)is the smallest level of output at which long-run average total cost is minimized.

---

Definitions:

Machining Department

A specific section or unit of a manufacturing facility where machining processes, such as drilling, milling, or turning, are carried out.

Manufacturing Overhead

All indirect costs associated with manufacturing a product, like utilities, maintenance, and salaries of support staff.

Assembly Department

A segment of a manufacturing firm where components are put together to form a finished product.

Departmental Predetermined Overhead Rates

The overhead rates assigned to specific departments based on estimated costs and activity levels, used for allocating overhead to products.