Returns to scale

Question 1

Minimum efficient scale

Answer 1

The lowest output which the firm is able to produce at the minimum achievable LRAS

Question 2

Low MES means ___ barriers to entry

Answer 2

Low

Question 3

Increasing returns to scale

Answer 3

Where an increase in factor imports leads to a more then proportionate increase in outputs

Question 4

Decreasing returns to scale

Answer 4

Where an increase in factor inputs leads to a less then proportionate increase in outputs

Question 5

Constant returns to scale

Answer 5

Where an increase in factor imports leads to a proportionate increase in outputs