In perfect competition, the conditions, p = MC = MR = AR = min.AC translate into the concept of financial or economic efficiency. On the other hand, technical efficiency is a concept that can be explained by the concept of production possibility curve, besides the way it has been introduced in Chapter 7. We will start off this chapter by an explanation of the underlying concept of technical efficiency using the production possibility curve.
KeywordsResource Allocation Production Function Marginal Productivity Factor Input Marginal Rate
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