Minimum Efficient Scale (MES)

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The Minimum Efficient Scale (MES) is the equilibrium point at which a company can produce goods at a competitive price.

Achieving MES minimizes long-term average total cost (LRATC).
MES is the point on a company’s long-run average cost curve where economies of scale are exhausted and constant returns begin.
MES takes into account many factors, and each of them can change over time, which requires a reassessment of the total costs.