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Economics Assignment Productive Efficiency

   

Added on  2020-04-07

8 Pages1041 Words93 Views
Running head: ECONOMICS ASSIGNMENTECONOMICS ASSIGNMENTName of student:Name of University:Author note:
Economics Assignment Productive Efficiency_1
1ECONOMICS ASSIGNMENTTable of ContentsQuestion 2.............................................................................................................3Question 4.............................................................................................................4Question 3.............................................................................................................5References.............................................................................................................8
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2ECONOMICS ASSIGNMENTQuestion 2Productive efficiency is condition where economy unable to produce any more of onegood without compromising production of another good.Productive efficiency occurs when output attained by equilibrium is supplied atminimum average cost. This kind of condition occurs in the long run equilibrium of perfectlycompetitive market. Under these circumstances firms operating using high cost units may notbe able to supply the whole industry because the market price falls due to forces ofcompetition.Allocative efficiency is a situation of the economy where production representsconsumer preferences. Under this situation every good or service is produced upto the pointwhere the last unit of production provides a marginal benefit to consumers that is equal to themarginal cost incurred during production.
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