The minimum efficient scale of a firm

A) is realized somewhere in the range of diseconomies of scale.
B) occurs where marginal product becomes zero.
C) is in the middle of the range of constant returns to scale.
D) is the smallest level of output at which long-run average total cost is minimized.

Minimum Efficient Scale

The smallest level of production at which a firm can achieve the lowest long-run average total costs.

Constant Returns to Scale

A situation in which the proportionate increase in inputs leads to an equal proportionate increase in outputs, meaning costs and outputs scale equally as production expands.

Diseconomies of Scale

A situation where a business's cost per unit increases as it produces more items, due to inefficiencies that arise with scaling up production.