Productive Inefficiency
Definition
Productive inefficiency occurs when an economy fails to produce goods and services at the lowest possible cost, resulting in wasted resources.
Related terms
Total Cost: The sum of all costs incurred in producing a specific quantity of goods or services.
Average Total Cost: The total cost divided by the quantity produced, representing the average cost per unit.
Economies of Scale: When a firm's average cost decreases as production increases due to factors like specialization and bulk purchasing.
"Productive Inefficiency" appears in:
Study guides (1)
AP Microeconomics - 4.3 Price Discrimination
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About Fiveable
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CCPA Privacy Policy
Resources
Cram Mode
AP Score Calculators
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Glossary
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Crisis Text Line
Help Center
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.