An economy will be allocatively efficient if

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when resources are allocated to produce goods and services that match consumer preferences and where price equals marginal cost. This means that the cost of producing one more unit of a good or service is equal to the additional benefit that consumers receive from consuming that additional unit. This ensures that society is producing the optimal mix of goods and services and making the most efficient use of its resources.

An Economy Will Be Allocatively Efficient If