Productive efficiency is
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 refers to a situation where goods and services are produced at the lowest possible cost. This means that resources are allocated in a manner that minimizes the average cost of production. Thus, option B is the best choice as it correctly defines productive efficiency. Option A refers to allocative efficiency, option C refers to pareto efficiency, and option D is not a valid definition.

Productive Efficiency Is