The difference between static efficiency and dynamic efficiency
Static efficiency measures how well a market uses its resources at a single point in time. Dynamic efficiency measures whether a market improves resource use over time through innovation and investment.
Real World
Amazon's warehouses operate close to productively efficient (static), while its annual $85bn R&D spend drives dynamic efficiency through innovations like drone delivery and AI logistics.
Exam Focus
Clearly state which type of efficiency you mean in every sentence — examiners cannot award marks for ambiguous references.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
How well did you know this?