CFA Practice Question

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CFA Practice Question

The smallest quantity of output at which long-run average cost reaches its lowest level is ______.

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
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