Productive inefficiency could arise from a. a waste of available labor b. a lack of resources c. an improvement in technology d. a movement along the production possibilities frontier e. too many goods being produced by the country or firm

Productive efficiency (also known as technical efficiency) occurs when the economy is using all its resources efficiently, producing maximum production with minimum resources. The concept is illustrated in the Production Opportunity Frontier (FPP) in which all points of the curve are the points of maximum productive efficiency (that is, no more products can be achieved from the present resources).

This happens when the production of an economic good is achieved at the lowest possible cost, given the production of another good (s). In other words, when it is achieved, given the need to produce other goods, the highest possible productivity of a good. In a situation of long-term equilibrium for markets in perfect competition, it is where the average cost is the base on the average of the total cost curve, that is, the cost curve where CM = A (T) C.