Answer to Question #302052 in Economics for Sand

Question

Differentiate between Optimum Firm and Representative Firm.

Answer 1

The optimum firm refers to the best or ideal size of the firm. More specifically optimum or best firm is considered as one that has set up a plant with lowest possible cost and is also operating it at its lowest average cost point.

Representative firm is a model firm not necessarily in existence which as an abstract construction is used to illustrate the operations of a market as a whole.