The Minimum Efficient Scale Is

question 14

Multiple Choice

The minimum efficient scale is

• A)the level of output where diminishing returns have not set in yet.
• B)the plant size that yields the most profit.
• C)the level of operation where long-run average costs are lowest.
• D)the smallest output level where the firm finally reaches productive efficiency.

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Definitions:

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total net benefit to society from the production and consumption of goods and services.

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and quantities.

Positively Sloped

A line or curve on a graph that moves upward and to the right, indicating a direct relationship between two variables.

Negatively Sloped

Describes a line on a graph that moves downward from left to right, indicating an inverse relationship between two variables.