Definition of Economic efficiency:
Economic efficiency is when all goods and factors of production in an economy are distributed or allocated to their most valuable uses and waste is eliminated or minimized.
Economic efficiency implies an economic state in which every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency. When an economy is economically efficient, any changes made to assist one entity would harm another. In terms of production, goods are produced at their lowest possible cost, as are the variable inputs of production.
The situation in which it is impossible to generate a larger welfare total from the available resources. In other words, the situation where some people cannot be made better-off by reallocating the resources or goods, without making others worse-off. It indicates that a balance between benefit and loss has been achieved. Also called allocative efficiency. See also economic inefficiency and Pareto optimum.
How to use Economic efficiency in a sentence?
- People dont realize that there is a difference between a need and a want, and this is why there is very few people who practice economic efficiency with any skill.
- The economic efficiency achieved was historic for our firm so we were able to throw a party for our analysts.
- Economic efficiency can involve efficient production decisions within firms and industries, efficient consumption decisions by individual consumers, and efficient distribution of consumer and producer goods across individual consumers and firms.
- You need to make sure that your business is proficient in economic efficiency so that you can get the most from your product.
- Economic efficiency is when every scarce resource in an economy is used and distributed among producers and consumers in a way that produces the most economic output and benefit to consumers.
- Pareto efficiency is when every economic good is optimally allocated across production and consumption so that no change to the arrangement can be made to make anyone better off without making someone else worse off.
Meaning of Economic efficiency & Economic efficiency Definition