Efficiency

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In Economics efficiency is a general term encompassing the idea that a system proceeds with the minimum amount of waste. Efficiency is improved if the amount of "waste" or "friction" is reduced.

A system can be called economically efficient if

• No one can be made better off without making someone else worse off.
• The most output is obtained from a given amount of inputs.
• Production proceeds at the lowest possible per unit cost.

These definitions of efficiency are not exactly equivalent. However, they all encompass the idea that nothing more can be achieved given the resources available.