Question

Is productive efficiency at value in greatest or least? The Minimum is 6.

STC = 260 + 25Q - 3.6Q^2 + .3Q^3

Answer 1

Since in the perfect competition, the productive efficiency occurs at point where MC cuts ATC at its minimum point. This is known as the productive efficiency point.

the productive efficiency condition;

MC=Min of ATC

Hence it can be said that productive efficiency will occur at a least value of ATC. Since the minimum value has been given 6.

Hence productive efficiency will be achieved at the least value ATC=P=$6.

The value of Q is not a real number but a imaginary number at the minimum value of 6. This has been shown below;