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Productive efficiency

is when resources are used the best way to produce a given output. So that means output is produced at the lowest cost. When this efficiency increases it means that, for example, each farm can produce more apples than before.



Allocative efficiency

is when resources are used in the way consumers wish for them to be. this is where MB=MC. If consumers want 5000 apples and 8000 Oranges, and each farm produces 1000 pieces of fruit, then there will be 5 farms producing apples and 8 producing Oranges

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Productive efficiency

is when resources are used the best way to produce a given output. So that means output is produced at the lowest cost. When this efficiency increases it means that, for example, each farm can produce more apples than before.



Allocative efficiency

is when resources are used in the way consumers wish for them to be. this is where MB=MC. If consumers want 5000 apples and 8000 oranges, and each farm produces 1000 pieces of fruit, then there will be 5 farms producing apples and 8 producing oranges

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12y ago
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Q: What is the difference between productive efficiency and allocative efficiency?
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