Allocative efficiency occurs when
A) marginal social benefit exceeds marginal social cost.
B) marginal social benefit equals marginal social cost.
C) total social benefit exceeds total social cost.
D) marginal social cost exceeds marginal social benefit.

Question

Quizplus · Accepted Answer

Allocative efficiency is achieved when the marginal social benefit of producing a good or service equals the marginal social cost of producing it. This balance ensures that resources are allocated in a way that maximizes overall social welfare.

Allocative Efficiency Occurs When