What’s allocative efficiency ?
When producers match equally what consumers want at prices they’re willing to pay ie where demand = supply or MC = AR.
At this point the price reflects the marginal cost of supply,
What’s productive efficiency ?
When a firm operates at the lowest feasible average cost. This is where MC=AC at the lowest point of the average cost curve.
What’s X-efficiency ?
When a firm minimises waste in the production process meaning that the firm will operate on the average cost curve and not above it .
What’s Dynamic Efficiency ?
When a firm makes supernormal profits in the Long Run and invests it in either R&D to make amazing products that consumers want to buy or capital to improve the production process creating efficiencies over time.
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MicroEconomics0
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1.1|1 Types Of Economies6
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1.1|2 Demand14
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1.1|3 Supply5
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1.1|4 Demand And Supply: Equilibrium5
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1.1|5 Functions of the Price Mechanism11
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1.2|1 Price Elasticity Of Demand (PED)12
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1.2|2 Income Elasticity of Demand (YED)7
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1.2|3 Cross-Price Elasticity of Demand (XED)9
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1.2|4 Price Elasticity of Supply (PES)10
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1.2|5 Consumer & Producer Surplus4
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1.2|6 Indirect Taxation9
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1.2|7 Subsidies6
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MacroEconomics0
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2.1|1 Positive And Normative Statements5
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2.1|2 The Economic Problem9
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2.1|3 Opportunity Cost3
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2.1|4 Production Possibility Frontiers16
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2.1|5 Specialisation And Division Of Labour6
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2.2|1 The Circular Flow Of Income4
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2.2|2 Income And Wealth6
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2.2|3 The Multiplier Effect11
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2.2|4 UK Macroeconomic Objectives13
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2.3|1 Inflation6
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2.3|2 Unemployment and Employment13
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2.1|12 Trade13
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Spare capacity7
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BM3 externalities22
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Market failure causes8
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Supply Side Policies:22
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BM 4.570
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BM64
