What is meant by "cost effective?"

Expert Answers

An illustration of the letter 'A' in a speech bubbles

The term "cost effective" refers to the amount of return that you get for a given level of expenditure in a production process.  

Whenever you produce a good or service, you incur costs.  You have to buy machinery, you have to pay your workers.  Of course, you want to get a return for these expenditures.  You will want your production process to be cost effective.  That is, you will want to get as much as production as you can for each dollar you incur in costs.

A process is cost effective if it gets as much production per dollar of costs as is possible.  

See eNotes Ad-Free

Start your 48-hour free trial to get access to more than 30,000 additional guides and more than 350,000 Homework Help questions answered by our experts.

Get 48 Hours Free Access
Approved by eNotes Editorial