Minimum efficient scale 


Home Site Map Add Term Search About Us Contributors 
Minimum efficient scaleThe smallest output of a firm consistent with minimum average cost. In small countries, in some industries the level of demand in autarky is not sufficient to support minimum efficient scale.Similar MatchesEfficient markets theory(EMT)Efficient markets theory(EMT)Principle that all assets are correctly priced by the market, and that there are no bargains. Efficient marketEfficient marketEconomy in which prices correctly reflect all relevant information. Efficient setEfficient setGraph representing a set of portfolios that maximize expected return at each level of portfolio risk. Efficient diversificationEfficient diversificationThe organizing principle of modern portfolio theory, which maintains that any riskaverse investor will search for the highest expected return for any particular level of portfolio risk. Efficient market theoryEfficient market theoryThe theory that claims that the current price of a share reflects everything that is known about the company and its future earnings potential, and that is it impossible to beat the market consistently.Efficient market theory suggests that the army of analysts and fund managers in the City whose job is to actively manage superiorperforming portfolios are engaged in a futile exercise because everything they find out is rapidly transmitted around the market, and share prices instantly reflect the common knowledge. In other words, no one can get one up on anyone else. And the logical extension of this is that passive funds  tracker and index funds  are the best place to park your money, because their management costs are much lower and they are mathematically structured to match the performance of their chosen index.Plenty of people disagree with efficient market theory, and their ranks include people like Warren Buffett who has consistently produced returns of over 20% on his portfolio over a 30 year period. Further SuggestionsOperationally efficient marketEfficient allocation Regression coefficient Inefficient portfolio Correlation coefficient Efficient capital market Coefficient of determination Gini Coefficient Coefficient of Variation Information Coefficient (IC) Efficient frontier Efficient market Earnings response coefficient Internally efficient market 
