MINIMUM EFFICIENT SCALE: The quantity of production that places a firm at the lowest point on its long-run average cost curve. The minimum efficient scale is highly prized by economists because it achieves production of a good at the lowest possible opportunity cost. In other words, it's not possible to produced a good any cheaper than at the minimum efficient scale. At this quantity the production involves foregoing the least amount of other goods.

     See also | production | long-run average cost curve | opportunity cost | economies of scale | increasing returns to scale | diseconomies of scale | decreasing returns to scale |

MINIMUM EFFICIENT SCALE, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 5, 2025].

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An equation that summarizes the four aggregate expenditures on gross domestic product by the four macroeconomic sectors. In the study of Keynesian economics, this equation is commonly used to summarize the demand side of the macroeconomy. The aggregate expenditures equation actually comes in three different versions depending on how many of the four sectors and their expenditures are included.

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