Minimum efficient scale

In microeconomics, the optimum operation is referred to as the minimum of the average total cost ( unit cost ). The corresponding unit price is called "long -term price floor " because the product price this limit, from the perspective of full cost accounting must not be less, so that no losses. For permanent losses can not occur ( private sector ) production. From the perspective of costing should be checked in advance whether the underflow, long-term price floor is still above the current price limit and thus still a positive contribution margin is achieved.

With a price equal to the optimum operation, the companies are in a zero - profit situation. The optimum operation in this case is also the break-even point, the income limit and the maximum profit (= 0 ). Consumers can buy the product at the best ( in the long run ) price and the weighted resource consumption per unit of product is minimal. To set the price of the firm's optimum is designed to operate especially useful when it is in a cutthroat competition or produces the product without financial gain.

Calculated the optimum operation, by setting the first derivative of the unit cost function = 0. If, then the thus determined value of x in the unit cost function, we obtain the long-term price floor.

The same result is obtained when considering the intersection of the marginal cost curve K ' ( x) and the unit cost curve k (x ) is calculated by setting both functions the same and determines the amount of solution.