A firm is said to be productively efficient when it is producing at the lowest point on the average cost curve (where marginal cost meets average cost).
This is the Production Possibility Curve(PPC) that illustrates what is possible and impossible to produce as well as where the optimal level is. Point A and B are productively efficient. Point C is inefficient because there could be more produced without an opportunity cost.
*A firm can be productively efficient, but not allocatively efficient.
*A firm can be productively efficient, but not allocatively efficient.