Asked by Timothy Hauser on May 16, 2024
Verified
When a firm operates at efficient scale, it is producing at the minimum point on its average total cost curve.
Efficient Scale
The level of production at which a firm operates at the lowest average total cost, optimizing its scale of operations.
Average Total Cost
The total cost of production divided by the quantity of output produced. It includes all fixed and variable costs.
- Identify conditions of efficient scale operation and excess capacity in firms.
Verified Answer
JB
Joseph BergnerMay 22, 2024
Final Answer :
True
Explanation :
When a firm operates at efficient scale, it is indeed producing at the minimum point on its average total cost curve, which means it is producing its output at the lowest possible cost per unit.
Learning Objectives
- Identify conditions of efficient scale operation and excess capacity in firms.
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