What Is PROFIT EFFICIENCY? PROFIT EFFICIENCY Definition & Meaning
Channel: Audiopedia
Date: 2018-10-17

What is PROFIT EFFICIENCY, What does PROFIT EFFICIENCY mean, PROFIT EFFICIENCY meaning, PROFIT EFFICIENCY definition, PROFIT EFFICIENCY explanation

Profit efficiency is a macro-economic concept used in assessing whether an economy, industry or supply chain is expending an optimally balanced level of rent for the use of capital.

Economies where too much profit is being extracted are over-paying the owners of capital at the expense of other contributors to a productive economy or industry.[citation needed] Economies and industries that provide insufficient returns to the owners of capital should find that capital is moved to alternate investments where the return is greater.[citation needed] Profit Efficient economies and industries are paying the minimum profit to owners of capital required to maintain the optimal level and distribution of capital investment.[citation needed] This concept has importance when discussing the relative outcome efficiency of industries such as the US Health Care System which has high customer costs, high government subsidy and yet has relatively poor health outcomes.[citation needed] This industry is said to be profit inefficient as compared to European health care models which have less customer and government inputs and yet better outcomes.[by whom?] The difference appears to be that the level of rent paid to capital investors in the US system is a greater proportion of the overall productive value of the industry. Similar observations are made about the US Financial System's impact on the US economy as a whole.[citation needed]
Source: Wikipedia.org