What is productive efficiency?
A)a situation in which resources are allocated to their highest profit use
B)a situation in which resources are allocated such that goods can be produced at their lowest possible average cost
C)a situation in which resources are allocated such the last unit of output produced provides a marginal benefit to consumers equal to the marginal cost of producing it
D)a situation in which firms produce as much as possible

Question

Quizplus · Accepted Answer

Productive efficiency is the situation in which resources are allocated in such a way that goods can be produced at their lowest possible average cost. This means that resources are being used in the most efficient way possible, with minimum wastage and maximum output. Firms that achieve productive efficiency are able to offer lower prices to their customers, which can result in increased demand and profits.

What Is Productive Efficiency