Where along the long-run average total cost curve will an efficient firm try to

Question

Where along the long-run average total cost curve will an efficient firm try to produce in the long run?

When there are constant returns to scale because this is the minimum efficient level of production, and cost per unit of output is at its lowest. Along the upward-sloping portion when there are diseconomies of scale because a firm will sell more output at that level of production. Along the downward-sloping portion when there are economies of scale because cost per unit of output is decreasing at that level of production.

Explanation / Answer

When there are constant returns to scale because this is the minimum efficient level of production, and cost per unit of output is at its lowest.

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