Please select all that are true regarding Minimum Efficient Scale (MES): if the quantity demanded is equal to Qmes, then the lowest cost solution is for one firm to supply the market MES is the quantity produced where average costs for a firm are at a minimum Long run average costs include fixed cost steps as quantities (scale) increase Quantities (x-axis) less than MES exhibit decreasing returns to scale due to diminishing marginal returns Short run average cost curves are for a given level of fixed cost, individually MES is the quantity demanded where total costs for a firm are at a minimum Quantities (x-axis) greater than MES exhibit decreasing returns to scale due to diminishing marginal returns Average costs do not include fixed cost since they don't change
Please select all that are true regarding Minimum Efficient Scale (MES):
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if the quantity |
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MES is the quantity produced where average costs for a firm are at a minimum |
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Long run average costs include fixed cost steps as quantities (scale) increase |
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Quantities (x-axis) less than MES exhibit decreasing returns to scale due to diminishing marginal returns |
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Short run average cost |
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MES is the quantity demanded where total costs for a firm are at a minimum |
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Quantities (x-axis) greater than MES exhibit decreasing returns to scale due to diminishing marginal returns |
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Average costs do not include fixed cost since they don't change |
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