A market is productively efficient if the price of a product equals the minimum average cost.

Question

Quizplus · Accepted Answer

Productive efficiency occurs when a firm produces at the lowest possible cost, which is achieved when the price of the product equals the minimum average cost. This ensures that resources are being used efficiently and not wasted, leading to the production of more goods and services at a lower cost to consumers.

A Market Is Productively Efficient If the Price of a Product