An equilibrium in which only the lowest-cost producers of goods and services survive is _________.

Question

Quizplus · Accepted Answer

Productive efficiency is the situation where the lowest-cost producers can survive, which means they can efficiently produce goods and services at the lowest possible cost. In other words, they are maximizing their profits by using their resources efficiently. This equilibrium allows for the most productive use of resources and demonstrates that the economy is operating efficiently. Therefore, A is the correct answer. B is not correct because allocative efficiency refers to the situation where resources are allocated to produce the combination of goods and services that people want the most. C and D are not correct because they are not valid economic terms.

An Equilibrium in Which Only the Lowest-Cost Producers of Goods