Minimum Efficient Scale

question 215

Multiple Choice

Minimum efficient scale

• A) is the point at which economies of scale begin for a particular firm.
• B) is the lowest rate of output per unit of time at which long-run average costs reach a minimum for a particular firm.
• C) applies only to firms with U-shaped long-run average cost curves.
• D) is the point at which diseconomies of scale begin for a particular firm.

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Definitions:

Exhaustible Resource

A natural resource that can be depleted and is not replenished over a short geological time frame.

Discount Rate

The discount rate is the interest rate used in discounted cash flow analysis to determine the present value of future cash flows, reflecting the time value of money and risk.

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period, used in capital budgeting to assess the profitability of an investment.

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