For productive efficiency to hold,
A)price must equal the marginal cost of the last unit produced.
B)price must equal marginal revenue of the last unit sold.
C)the average variable cost must be minimized in production.
D)the average total cost must be minimized in production.

Question

Quizplus · Accepted Answer

Productive efficiency occurs when the average total cost is minimized in production. This means that resources are being used in the most efficient way possible and that the cost of producing each unit is as low as it can be. This does not necessarily mean that the price charged for each unit is equal to the marginal cost or marginal revenue, although these concepts are important for determining the profit-maximizing level of output.

For Productive Efficiency to Hold