The Canadian economy is achieving allocative efficiency if
A) there are no idle resources in the economy.
B) marginal product is equal for all factors of production.
C) marginal cost is equalized across industries.
D) marginal cost equals price in all industries.
E) price equals average cost in all industries.

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when firms produce the quantity of goods at which marginal cost equals price. Therefore, choice D is the correct answer as it states that marginal cost equals price in all industries, indicating allocative efficiency. The other choices may also indicate efficiency in different aspects, but they do not directly address allocative efficiency.

The Canadian Economy Is Achieving Allocative Efficiency If