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Optimum allocation is when productive and allocative efficiency co-exist.

Productive efficiency is achieved when when products are made with the least possible use of the resources, i.e, by incurring lowest possible costs in producing them

Allocative efficiency is achieved when the combination of products produced provide consumers the greatest possible satisfaction, i.e, goods which are most wanted are produced.

When both these elements are present, there is also economics efficiency. This means that resources are used in the best way possible, i.e, producing the goods which are most wanted with the least possible use of resources

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