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    Hi. Is productive efficiency achieved when the firm produces at the lowest point on the SHORT RUN AVERAGE COST CURVE or the LONG RUN average cost curve?


    How do i explain it in an exam, do i say e.g. this is the point where costs are lowest therefore wastage is lowest thus efficiency is maximised or what? Thank you.
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    Productive efficiency could take place in the short run or long run. There are many interpretations of productive efficiency (e.g can't produce more of a good without producing less of another good). Use the one from your textbook
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    (Original post by keynes24)
    Productive efficiency could take place in the short run or long run. There are many interpretations of productive efficiency (e.g can't produce more of a good without producing less of another good). Use the one from your textbook
    So in my exam do i say it occurs at the minimum SRAC or minimum LRAC?
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    (Original post by BrownieLover)
    So in my exam do i say it occurs at the minimum SRAC or minimum LRAC?
    Minimum point of the average cost curve or any similar definition
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    (Original post by keynes24)
    Minimum point of the average cost curve or any similar definition
    Yes but i would draw a graph to illustrate my point and would have to say what the graph is ie. short or long run
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    (Original post by BrownieLover)
    Yes but i would draw a graph to illustrate my point and would have to say what the graph is ie. short or long run
    I already answered your question. I think you are complicating things. You can easily just indicate AC. Is this for AS or A2? What is the question? In which situation would you introduce this? I would only indicate a difference between short run and long run if referring to different market structures (monopolistic competition, perfect competition) or indicating a difference between increasing/diminishing returns and economies/diseconomies of scale which are A2 topics
 
 
 
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