We can say that the allocation of resources is efficient if:
A) producer surplus is maximised
B) consumer surplus is maximised
C) total surplus is maximised
D) total surplus is minimised

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when total surplus is maximized, meaning that the combination of goods and services produced and their corresponding prices result in the greatest benefit to society as a whole. Maximizing producer surplus or consumer surplus alone may not necessarily result in an efficient allocation of resources, as it ignores the other party's welfare. Similarly, minimizing total surplus would be detrimental to society, as it would result in a decreased level of welfare for both producers and consumers.

We Can Say That the Allocation of Resources Is Efficient