Resource use is allocatively efficient
A) when marginal benefit equals marginal cost.
B) whenever marginal benefit exceeds marginal cost.
C) whenever marginal cost exceeds marginal benefit.
D) when the maximum possible quantity is being produced.

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when the marginal benefit of consuming a good equals the marginal cost of producing it, ensuring that resources are allocated in the most efficient way to meet the preferences of consumers.

Resource Use Is Allocatively Efficient