Microeconomics Theme 3 Flashcards
1
Q
Types of efficiency
A
Productive efficiency
Allocative efficiency
X-efficiency
Dynamic efficiency
2
Q
What is productive efficiency
A
When average total cost is at its lowest, when MC=AC
3
Q
What is allocative efficiency
A
When welfare is maximised, when MC=Price/AR/Demand
4
Q
X-efficiency
A
