Micro econ true or false?

Question

when average total cost rises if a producer either increases or decreases production, then the firm is said to be operating at efficient scale

Answer 1

Yes, you are right . The statement is false if we are considering shortrun curves. In the shortrun average total costs  This is the p0int through which the shortrun marginal cost curve intersets from below, the average total costs. The firm might find worthwhile to prosduce higher output than what this point indicates. At mc= mr are equal and the firm maximizes profut for the given scale.But the statement is true if we are talking about the long-run average cost curve., Here the lowest point is indicative of the efficiency of the scale. The firm may operate at a higher level of output to maximise profit in the short-run but it goes to the next higher scale operation, its average total cost will be higher and the same will be effect of decreasing the scale.