We measure how efficient something is based on how much energy it took to make it. So a reduction in a supply routes distance will make this product more efficient tomoroduce for example. Or if other technical advances made it cheaper and easier to make.

    If a chewing gum sold for $100, using my example, this is wasteful wlbecaise $100 can buy many other things like 7 quarts of maple syrup. This purchase isn’t an efficient use of capital but it’s good for this luxury chewing gum producer.

    OTOH if chewing gum sold for $2, it’s a lot more efficient. A consumer can buy 50 times more per unit of capital than the previous luxury gum.

    Same way, if a product were super expensive we can measure its inefficiency by stating how much surplus capital it generated.

    In western economy why don’t we measure the “excess dollar latency” of goods and services?

    Why aren’t super profitable things not considered wasteful or inefficient?
    byu/throwRA_157079633 inAskEconomics



    Posted by throwRA_157079633

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