The minimum efficient scale is:
A. the quantity after which it makes no sense for a firm to produce.
B. the minimum quantity where a firm would be able to produce profitably.
C. the output level beyond which the firm will not experience scale economies.
D. the output level beyond which the firm will experience scale economies.
Answer: C
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According to the substitution effect, an increase in the price of oranges will: a. cause consumers to consume fewer apples because more money is spent on oranges
b. cause consumers to spend more on oranges because a higher price signals that oranges are better than apples. c. cause consumers to replace some oranges with other fruit that is now relatively cheaper than oranges. d. leave consumers with less money to spend on all goods.
Choose the letter of the diagram in Figure 16.1 that illustrates the effects of supply-side policies designed to increase the capacity of the economy.
A. a. B. b. C. c. D. d.
If Spain decreases subsidies to its olive growers, the price of olives in the U.S. will fall.
Answer the following statement true (T) or false (F)
Under a market system, the people with information about buyers' desires, production technology and resources make the decisions.
Answer the following statement true (T) or false (F)