What is productive efficiency?

A. a situation in which resources are allocated such that goods can be produced at their lowest possible average cost

B. 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

C. a situation in which firms produce as much as possible

D. a situation in which resources are allocated to their highest profit use

Question

Business

Megan Wilkins

5 May, 09:48

What is productive efficiency?

A. a situation in which resources are allocated such that goods can be produced at their lowest possible average cost

B. 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

C. a situation in which firms produce as much as possible

D. a situation in which resources are allocated to their highest profit use

+5

Answers (1)

Know the Answer?

Dominick Hughes · Answer 1

The correct answer is (A)

Explanation:

Product efficiency is a key aspect which every firm or organisation must achieve to improve revenue and profits. Product efficiency is a way to allocate resource to produce goods and service at the lowest average cot possible. Firms usually apply economist of scale to achieve product efficient. Product efficiency can only be achieved by using scarce resources efficiently and effectively.