When a given set of goods are produced at the lowest possible costs then there is productive efficiency in the economy. In other words, if a given sets of good are produced at the minimum point of short run average cost curve (that is, point of intersection of marginal cost curve and average cost curve) then there is productive efficiency in the economy.
Allocative efficiency on the other hand is different from productive efficiency. It is concerned with the allocation and distribution of the scarce resources in the economy. Allocative Efficiency Refers to the best allocation of resources, best in the sense that it fully represents the preferences of the consumers.
