What is EFFICIENCY PRINCIPLE?

An economic theory that states that the maximum social benefit that is received from any type of action is received when the marginal social costs of resource allocation is equal to the benefits from such an allocation of resources. Lays the groundwork on how critical business decisions regarding resource allocation are made.

More On This Topic



Link to This Definition
Did you find this definition of EFFICIENCY PRINCIPLE helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary