What is allocative efficiency?
A)Production of a combination of products that best satisfies consumers' demands.
B)The maximization of inputs for a given level of output.
C)The production of an output at the lowest possible cost.
D)The minimization of output for a given level of inputs.

Question

Quizplus · Accepted Answer

Allocative efficiency refers to the production of a combination of goods and services that best satisfies consumers' demands. It involves producing the right quantity and mix of goods and services that people value most highly, given the available resources and technology. This ensures that resources are allocated to their highest-valued use and that consumers' welfare is maximized.

What Is Allocative Efficiency