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Economic efficiency

In microeconomics, economic efficiency, depending on the context, is usually one of the following two related concepts: Allocative or Pareto efficiency: any changes made to assist one person would harm another.Productive efficiency: no additional output of one good can be obtained without decreasing the output of another good, and production proceeds at the lowest possible average total cost.These definitions are not equivalent: a market or other economic system may be allocatively but not productively efficient, or productively but not allocatively efficient.

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