Three types of efficiency necessary to achieve economic efficiency are:

• Allocative efficiency: when goods and services produced in an economy are distributed to the consumers according to their needs and demands, it is said that the economy is engaging in allocative efficiency.
• Productive efficiency: productive efficiency is said to be achieved when a business organization is able to produce maximum output with the minimum cost of production.
• Social efficiency: when goods and services are distributed optimally in society, then social efficiency takes place.