When a nation is producing the allocatively efficient quantity of a product, the marginal benefit of producing the good equals the marginal cost of producing that good.

Question

Quizplus · Accepted Answer

Allocative efficiency is achieved when the production of a product is at a point where the marginal benefit to consumers equals the marginal cost of producing it, indicating that resources are being allocated in the most efficient manner.

When a Nation Is Producing the Allocatively Efficient Quantity of a Product