When a Firm Is at Its Efficient Scale of Operation

question 147

Multiple Choice

When a firm is at its efficient scale of operation it produces the

• A) maximum rate of output at which long-run average cost is at a minimum.
• B) minimum rate of output at which long-run average cost is at a minimum.
• C) maximum rate of output where we have lowest long-run marginal cost.
• D) minimum rate of output where we have lowest long-run marginal cost.
• E) minimum rate of output where we have highest long-run marginal cost.

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Definitions:

Paid in Capital in Excess

The amount received from shareholders in excess of the par or stated value of the shares, also known as additional paid-in capital or share premium.

Common Stock

A type of equity security that represents ownership in a corporation, with holders potentially entitled to dividends and voting rights.

Discount

A reduction in the price of goods or services offered by a seller, often used as a strategy to increase sales or reward customer loyalty.