Which of the following conditions does not need to occur for a market to achieve allocative efficiency?
A)Consumers' maximum willingness to pay equals producers' minimum acceptable price for the last unit of output.
B)The sum of producer and consumer surplus is maximized.
C)The total revenue received by producers equals the total cost of production.
D)The marginal benefit of the last unit produced equals the marginal cost of producing that unit.

Question

Quizplus · Accepted Answer

Allocative efficiency is achieved when the production and consumption of goods and services are optimized in a way that the marginal benefit to consumers equals the marginal cost of production. This concept does not require that the total revenue received by producers equals the total cost of production, as this condition relates more to productive efficiency and profitability rather than allocative efficiency.

Which of the Following Conditions Does Not Need to Occur