Efficiency Flashcards
1
Q
What is productive efficiency?
A
When average total costs are at its lowest
2
Q
When does productive efficiency occur on a diagram?
A
When MC=AC
3
Q
What is allocative efficiency?
A
When welfare is maximised
4
Q
Where is allocation efficiency on a diagram?
A
MC=AR
5
Q
What is demand equal to for allocation efficiency?
A
D=AR=Price
