Economic Efficiency 2019-12-20 08:00:00

Economic Efficiency

Economic efficiency is an economic state where all resources have been efficiently allocated to all individuals or entities. In other words, goods have been produced at the lowest cost and delivered in the most efficient manner. Waste and inefficiencies have been eliminated.

Economic efficiency is a zero-sum game. Each resource has a person it can be allocated to. If we assume a 1-1 relation between goods and consumers, taking one good away from someone and giving it to someone else results in a loss for one person and gain for the other (zero goods vs. two goods). However, the net benefit across all goods and consumers is zero.


Manage risk and help maximize opportunity

What is Investment Property Wealth Management?

Download the eBook