Productive efficiency formula
- when is productive efficiency achieved
- is productive efficiency achieved in perfect competition
- is productive efficiency achieved in. monopolistic competition
- productive efficiency is achieved when production costs are
Productive efficiency point on graph...
An image of a light bulb.
What is Productive Efficiency?
Productive efficiency is a key concept in economics that refers to a situation when firms or economies produce maximum output at the lowest possible cost.
Allocative efficiency
It is also called production efficiency.
It means that minimum resources are used to produce maximum output. The following two cases can define productive efficiency:
- Maximum output is produced by using a given amount of available inputs.
- Given output is produced at the lowest possible cost by using minimum resources.
Basic Terms
Economic Efficiency
Economic efficiency is said to exist when scarce resources are used in the ‘best’ possible way, i.e., when the maximum of infinite wants are satisfied by using scarce resources.
It means that minimum resources are used to produce maximum output, which will satisfy maximum wants. Productive efficiency is one type of economic efficiency. Other kinds of efficiency are allocative efficiency, pareto efficiency, and dynamic efficiency.
Efficient Resource Allocation
Resources are said to be efficiently allocated if they ar
- what is productive efficiency
- when production efficiency does not occur