What term describes the output that minimizes long-run average costs?

The term that describes the output level at which long-run average costs are minimized is known as minimum efficient scale. This concept is crucial for businesses because it indicates the production volume where a company can produce goods at the lowest per-unit cost. When a firm operates at or above this level of output, it can spread fixed costs over a larger number of units, improving cost efficiency and competitiveness in the marketplace.

In contrast, economies of scale refer to the cost advantages that a business experiences as it increases production levels, but it does not precisely define the point at which average costs are minimized. Horizontal integration focuses on the process of a company acquiring or merging with competitors to increase market share rather than addressing production efficiency directly. Synergy refers to the concept that the combined value and performance of two companies will be greater than the sum of the separate individual parts, which, while important in strategic management, does not pertain specifically to cost minimization in production.