For productive efficiency to hold,

Question

Quizplus · Accepted Answer

Productive efficiency occurs when firms produce at the minimum point on their average total cost curve. This means that the cost of producing the last unit is minimized, which occurs at the point where average total cost is minimized. Therefore, the correct choice is D - average total cost is minimized in production for productive efficiency to hold. A and B are related to allocative efficiency, which concerns whether resources are being allocated to produce the goods and services that consumers value most highly. C is related to minimizing costs, but not necessarily to achieving productive efficiency.

For Productive Efficiency to Hold