The economic principle includes the economical use of scarce resources. Management is necessary because the goods to satisfy needs are limited, but needs are practically unlimited. The “economic principle” demands that scarce goods be used in such a way that the best possible relationship between the satisfaction of needs and the consumption of goods is achieved.
Economic efficiency and the level of costs
The principle of economic efficiency and the level of costs are loosely related. The obligation to act economically does not mean that the cheapest offer always has to be chosen. The cheapest is not always the cheapest and therefore the most economical. Aspects such as reliability, durability or special regional conditions can influence the decision.
The economic principle states that the best possible relationship between expenditure and income must be achieved.