The Minimum Efficient Scale for a Firm Is the

question 161

Multiple Choice

The minimum efficient scale for a firm is the

• A)lowest rate of output at which long-run average cost is at a minimum
• B)lowest rate of output at which short-run average total cost is at a minimum
• C)lowest rate of output at which short-run average variable cost is at a minimum
• D)average of the rates of output at which long-run average cost is at a minimum
• E)average of the rates of output at which short-run average total cost is at a minimum

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Definitions:

Replenishment Lot Size

The quantity of stock ordered to replenish inventory, balancing order costs with storage costs.

Cycle Inventory

The portion of inventory that a company cycles through to fulfill its regular sales orders.

Indirect Materials

Materials used in the production process that do not become part of the final product, such as lubricants and cleaning supplies.

Transaction Cost

The expenses incurred when buying or selling goods or services, including fees, communication charges, and other financial costs.