A market is allocatively efficient if
A) the sum of the consumer surplus and the producer surplus has been maximised.
B) profit has been maximised.
C) producer surplus has been maximised.
D) consumer surplus has been maximised.

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when the sum of consumer surplus and producer surplus is maximized, indicating that resources are allocated in the most efficient way, satisfying both producers and consumers.

A Market Is Allocatively Efficient If