What is a firm's minimum efficient scale? What will be an ...

[gonzo233]

What is a firm's minimum efficient scale?
 
  What will be an ideal response?

Question 2

Refer to Figure 6-9. The data in the diagram indicates that DVDs are
 
  A) luxury goods.
  B) inelastic goods.
  C) necessities.
  D) both luxury goods and inelastic goods.
  E) both necessities and inelastic goods.

[Tonyam972]

Answer to Question 1

Minimum efficient scale is the smallest quantity of output at which long-run average cost reaches its lowest level. If the long-run average cost curve has the typical U shape, the minimum point of the LRAC identifies the level of output that represents the firm's minimum efficient scale.

Answer to Question 2

A

[gonzo233]

Excellent

[bitingbit]

Thanks for the timely response, appreciate it