- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 1. The Firm and Market Structures
- Subject 5. Understanding Economies and Diseconomies of Scale
CFA Practice Question
The smallest quantity of output at which long-run average cost reaches its lowest level is ______.
B. diseconomies of scale
C. constant returns to scale
D. economies of scale
A. minimum efficient scale
B. diseconomies of scale
C. constant returns to scale
D. economies of scale
Correct Answer: A
User Contributed Comments 3
| User | Comment |
|---|---|
| hdavid57 | Does minimum efficient scale occur at the point where economy of scale and constant returns to scale meet? |
| rfvo | True...........The minimum efficient scale (MES) is the output for a business in the long run where the intern. al economies of scale have been fully exploited. It corresponds to the lowest point on the long run average total cost curve and is also known as the output of long run productive efficiency. |
| Huricane74 | Minimum Efficient Scale https://www.youtube.com/watch?v=rcVnIk8GLaw |