- A measure of the ability of a manufacturer to produce the maximum output of acceptable quality with the minimum of inputs. One company is more efficient than another if it can produce the same output as the other with fewer inputs, irrespective of the price factor.
2. (economic efficiency) A measure of an organisation’s ability to produce and distribute its product at the lowest possible cost. A firm can have a high technical efficiency but a low economic efficiency because its prices are too high to meet competition.
