Productive inefficiency implies that
A)it is possible to obtain gains in one area without losses in another.
B)it is impossible to obtain gains in one area without losses in another.
C)there are too many resources.
D)there are too few resources.

Question

Quizplus · Accepted Answer

Productive inefficiency refers to a situation where a firm is not producing at the lowest possible cost. In such a case, it is possible to improve efficiency in one area (e.g., by reducing waste) without reducing efficiency in another area. Therefore, it is possible to obtain gains in one area without losses in another.

Productive Inefficiency Implies That