Productive efficiency occurs in perfect competition because the firm produces at the minimum of the:

Question

Quizplus · Accepted Answer

Productive efficiency occurs when a firm produces at the minimum point of the average total cost (ATC) curve. This is because ATC includes both fixed and variable costs, so producing at the minimum ATC means the firm is producing at the lowest possible cost per unit. The other curves (AFC, AVC, and MR) do not reflect the total cost of production.

Productive Efficiency Occurs in Perfect Competition Because the Firm Produces