MINIMUM EFFICIENT SCALE: The quantity of production that places a firm at the lowest point on its long-run average cost curve. The minimum efficient scale is highly prized by economists because it achieves production of a good at the lowest possible opportunity cost. In other words, it's not possible to produced a good any cheaper than at the minimum efficient scale. At this quantity the production involves foregoing the least amount of other goods. See also | production | long-run average cost curve | opportunity cost | economies of scale | increasing returns to scale | diseconomies of scale | decreasing returns to scale |
