AP MicroeconomicsCore Economic Concepts
Productive Efficiency
Productive efficiency is an economic state where a firm produces a given level of output at the lowest possible cost.
Productive efficiency occurs when a firm is using the least amount of inputs (resources) to produce the maximum amount of output. This is achieved when a firm is producing at the minimum point of its average total cost curve. Productive efficiency is one of the conditions under which markets are considered economically efficient.
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