Efficiency of production refers to how well resources are used in the production process to minimize waste and maximize output. It is often measured by comparing the inputs utilized with the final outputs achieved.
Related terms
Productivity: The measure of output produced per unit input used within a given time frame.
Economies of scale: When an increase in production leads to lower average costs per unit due to spreading fixed costs over greater quantities produced.
Division of labor: Breaking down the production process into specialized tasks performed by different individuals or groups to increase overall efficiency.