Micro 5.10 0.0 / 5 ? EconomicsStatic Efficiency and Dynamic EfficiencyA2/A-levelAQA Created by: neve.whinnCreated on: 15-03-20 16:02 What is static efficiency? Efficiency at a point in time. 1 of 8 What does static efficiency consist of? Product efficiency and allocative efficiency. 2 of 8 How does perfect competition perform in terms of efficiency? Well in terms of static efficiency but less well in terms of dynamic efficiency. 3 of 8 What is dynamic efficiency? Improvements in productive efficiency over time. 4 of 8 What may dynamic efficiency arise from? Technological development. 5 of 8 What can dynamic efficiency lead to? A reduction in a firm’s costs at every level of output. 6 of 8 Why do larger firms in oligopolies or monopolies find it easier to be dynamically efficient? They may have easier access to the necessary financial resources to be dynamically efficient, i.e. from supernormal profits. 7 of 8 How is dynamic efficiency shown? With a reduction in long run average costs, leading to a fall in cost at every level of output. 8 of 8
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