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Efficiency (economics)




In order to achieve Economic efficiency the following need to occur:
1) Any product X is produced at the lowest cost.
2) The economy uses all the raw materials that in hand. Example: X,Y are produced by a,b. In efficient productivity, we use both a,b in a way that we cannot produce anymore X or Y with the a,b that had left.

There are several measures of economic efficiency,

including:


For applications of these principles see:



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