In an industry, the minimum efficient scale is reached when a firm produces 500 units of output at an average cost of $20 per unit. If a smaller firm in the same industry produces 300 units of output with an average cost of $25 per unit, what can be concluded? The smaller firm is operating above the minimum efficient scale The smaller firm is operating at the minimum efficient scale. The smaller firm is operating below the minimum efficient scale O The smaller firm's average cost is irrelevant to the concept of minimum efficient scale

In an industry, the minimum efficient scale is reached when a firm produces 500 units of output at an average cost of $20 per unit. If a smaller firm in the same industry produces 300 units of output with an average cost of $25 per unit, what can be concluded? The smaller firm is operating above the minimum efficient scale The smaller firm is operating at the minimum efficient scale. The smaller firm is operating below the minimum efficient scale O The smaller firm's average cost is irrelevant to the concept of minimum efficient 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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