Final answer:
Efficiency is the goal of using available resources to their fullest extent to produce the most wanted goods and services demanded by people. Reducing waste and improving efficiency can have several benefits, such as conserving natural resources, preventing pollution, increasing economic security, and saving energy. It can also lead to cost savings and lower prices for consumers.
Step-by-step explanation:
When businesses optimize their resources and productivity levels and reduce wasted resources, including time, materials, and money, they are focusing on efficiency. Efficiency is the goal of using available resources to their fullest extent to produce the most wanted goods and services demanded by people.
Reducing waste and improving efficiency can have several benefits, such as conserving natural resources, preventing pollution, increasing economic security, and saving energy. It can also lead to cost savings and lower prices for consumers, as businesses become more productive and offer a larger variety of goods.
One way businesses can improve efficiency is by considering the optimal scale of production, where the quantity of output is determined based on the least costly production technology. Many industries experience economies of scale, where as the quantity of output increases, the cost per unit goes down. This means that larger factories or businesses can produce at a lower average cost than smaller ones.