Types of efficiency

Allocative efficiecy

Allocative efficiecy

Resources follow demand / society surplus is maximised / net social benefit is maximised

Productive efficiency

When a firm operates at lowest point on AC / Full exploitation of economies of scale

X - efficiency

Minimised waste / production on AC curve

Dynamic efficiency

Re-investment of LR Supernormal profit (Occurs over time)

Static Efficiency

Occur at a single point (like allocative and productive)