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Productive Efficiency:

  • This occurs at the bottom of the average cost curve
  • Depends on reaping all available economies of scale.
  • Occurs at the minimum point on the AC curve

Allocative Efficiency:

  • Occurs when a firm produces a range of goods using scarce resources in such a way as to meet the demands of customers.
  • Firms will charge a price equal to the marginal cost of manufacturing the good.
  • Price = MC

Technocal Efficiency:

  • This is when any given output is produced with…



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A succinct reminder of the different types of efficiency which allows you to test your knowledge.

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