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Minimum Efficient Scale
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Summary
Minimum Efficient Scale
(MES) is the smallest scale at which a firm can operate while enjoying the lowest
Average costs
, balancing
Economies Of Scale
with potential diseconomies as size increases. Achieving MES is crucial for firms aiming to be competitive in industries with significant scale economies, as it influences
Pricing Power
and
Market structure dynamics
.
Concepts
Economies Of Scale
Diseconomies Of Scale
Average Cost Curve
Market Structure
Cost Efficiency
Long-Run Average Cost
Scale Economies
Relevant Degrees
Economic Theory and Concepts 70%
Business Administration 30%
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