Technical efficiency is achieved when a firm produces
A)At an amount indicated by a point on the production function.
B)Below the opportunity cost for the resources it uses.
C)Enough output to cover the opportunity cost of resources.
D)An amount less than or equal to the production function.

Question

Quizplus · Accepted Answer

Technical efficiency is achieved when a firm produces at an amount indicated by a point on the production function, which represents the maximum output that can be produced with a given level of input. Therefore, option A is the correct choice. Option B refers to producing below the opportunity cost for the resources used, which is not efficient. Option C refers to producing enough output to cover the opportunity cost of resources, which is a minimum requirement for efficiency but does not necessarily represent technical efficiency. Option D refers to producing an amount less than or equal to the production function, which is again not necessarily efficient as it does not maximize output given the level of input.

Technical Efficiency Is Achieved When a Firm Produces