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DEFINITION of 'Efficiency'. A level of performance that describes a process that uses the lowest amount of inputs to create the greatest amount of outputs. Efficiency relates to the use of all inputs in producing any given output, including personal time and energy. Next Up.
Efficiency is concerned with the optimal production and distribution or these scarce resources.here are different types of efficiency. 1. Productive efficiency. This occurs when the maximum number of goods and services are produced with a given amount of inputs. This will occur on the production possibility frontier.