What is minimum efficient scale? Minimum efficient scale is A. the level of output at which a firm begins to experience economies of scale. B. the level of output at which the long-run average cost of production no longer decreases with output. C. the level of output at which the marginal cost of production reaches a minimum. D. the level of output at which the long-run average cost of production begins to decline. O E. the level of output at which all diseconomies of scale are exhausted. What is likely to happen to firms that do not reach minimum efficient scale? A firm that does not reach minimum efficient scale will likely A. become a natural monopoly. B. earn less profit than other firms in the industry in the long run. C. charge a lower price for its output than other firms in the industry. D. earn more profit than other firms in the industry in the short run. O E. be experiencing constant returns to scale.

What is minimum efficient scale? Minimum efficient scale is A. the level of output at which a firm begins to experience economies of scale. B. the level of output at which the long-run average cost of production no longer decreases with output. C. the level of output at which the marginal cost of production reaches a minimum. D. the level of output at which the long-run average cost of production begins to decline. O E. the level of output at which all diseconomies of scale are exhausted. What is likely to happen to firms that do not reach minimum efficient scale? A firm that does not reach minimum efficient scale will likely A. become a natural monopoly. B. earn less profit than other firms in the industry in the long run. C. charge a lower price for its output than other firms in the industry. D. earn more profit than other firms in the industry in the short run. O E. be experiencing constant returns to scale.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 21P

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