What are the three types of efficiency necessary to achieve economic efficiency?

Business Dec 28, 2020

Expert Solution

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.

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