-In the figure above, the allocatively efficient output of computers is
A)3 million per year.
B)4 million per year.
C)the largest amount possible.
D)2 million per year.

Question

-In the figure above, the allocatively efficient output of computers is
A)3 million per year. 
B)4 million per year. 
C)the largest amount possible. 
D)2 million per year.

Quizplus · Accepted Answer

Allocative efficiency occurs when the marginal benefit of a good or service equals its marginal cost. In this case, the marginal benefit of computers is 4 million per year, and the marginal cost is 3 million per year. Therefore, the allocatively efficient output of computers is 4 million per year.

-In the Figure Above, the Allocatively Efficient Output of Computers