A market that is achieving allocative eﬃciency also is assumed to be achieving productive
eﬃciency.

Question

Quizplus · Accepted Answer

Allocative efficiency means that resources are allocated in the most efficient way to meet consumer preferences, while productive efficiency means that goods are produced at the lowest possible cost. When a market achieves allocative efficiency, it is also assumed to be achieving productive efficiency because resources are being used in the most efficient way to produce goods. Therefore, the statement is true.

A Market That Is Achieving Allocative Eﬃciency Also Is Assumed