When allocative efficiency occurs,
A) an economy produces the goods and services most highly valued.
B) marginal benefit exceeds marginal cost by some amount.
C) technology must be increasing.
D) we can simultaneously produce more of all goods.
E) marginal benefit exceeds marginal cost by as much as possible.

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when an economy produces the goods and services that are most highly valued by consumers. This means that resources are being allocated in a way that maximizes satisfaction and benefits society as a whole.

When Allocative Efficiency Occurs