What is productive efficiency?
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 that 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 occurs when resources are allocated in a way that minimizes the average cost of production. This means that goods can be produced at the lowest possible cost, which maximizes the total output that can be produced with the given resources. In other words, productive efficiency means achieving the highest possible output with the lowest possible cost.

What Is Productive Efficiency