When does inefficiency exist in any economy
A)when a good is not being consumed by buyers who value it most highly
B)when a good is not distributed fairly among buyers
C)when a good is not being produced by the highest-cost producer
D)when a good is being consumed by buyers who value it most highly

Question

Quizplus · Accepted Answer

Inefficiency exists in an economy when a good is not being consumed by buyers who value it most highly. This is because the resource is not being allocated to its most productive use, and there is a loss of potential gains from trade. If a good is consumed by buyers who do not value it highly, there may be excess supply in the market that could have been used elsewhere to create more value for society.

When Does Inefficiency Exist in Any Economy