Dynamic efficiency is, by definition, the rate of increase in productive efficiency . In other words, it is the rate of decline of the AC curve. If Cyrix improves its productive efficiency more rapidly than Intel, then Cyrix is more dynamically efficient than Intel.
Dynamic efficiency is enormously important for the long-run standard of living of a society.
Unless AC curves fall, you can only improve people's standard of living by building more capital goods and working more hours. If you innovate, you may not reap much of the gain if everyone can cheaply imitate you. Copyrights apply to writing, music, architectural blueprints, and so on, expire after the author's death plus 50 years, and cannot be enforced against independent discovery. Yes, because the marginal cost of using a new idea is zero even though the average cost of creating it is positive. But by helping to solve the free-rider problem associated with innovation, intellectual property rights may greatly increase dynamic efficiency.