-According to the diagram in the figure above, an allocatively efficient use of resources requires that production and consumption of gasoline be
A) 1 million gallons of gasoline per month.
B) 2 million gallons of gasoline per month.
C) 3 million gallons of gasoline per month.
D) 4 million gallons of gasoline per month.

Question

-According to the diagram in the figure above, an allocatively efficient use of resources requires that production and consumption of gasoline be
A) 1 million gallons of gasoline per month. 
B) 2 million gallons of gasoline per month. 
C) 3 million gallons of gasoline per month. 
D) 4 million gallons of gasoline per month.

Quizplus · Accepted Answer

Allocative efficiency occurs where the marginal cost of production equals the marginal benefit to consumers. The diagram likely indicates that this balance is achieved at 2 million gallons per month.

-According to the Diagram in the Figure Above, an Allocatively