Efficiencies Flashcards
1
Q
What is Allocative efficiency
A
-Where resources follow consumer demand
- Where society surplus is maximmised
-Where net social benefit is maximised
2
Q
What is productive efficiency
A
-When a firm is operating on the lowest point of AC curve
-Full exploitation of all EOS
3
Q
What is X efficiency
A
-Minimising waste
-Production on the AC curve
4
Q
What is dynamic efficiency
A
-Reinvestment of LR super normal profits
-Super normal profits
5
Q
At what point is there allocative efficiency
A
AR=MC, S=D, MSB=MSC
6
Q
At what point is there productive efficiency
A
Min point on AC curve
7
Q
At what point is there Dynamic efficiency
A
AR>AC
8
Q
A
