Figure 10.17
-Refer to Figure 10.17.The allocatively efficient output for the firm represented in the diagram is

Question

Figure 10.17 -Refer to Figure 10.17.The allocatively efficient output for the firm represented in the diagram is A)Q_f units B)Q_g units C)Q_h units D)Q_j units

Quizplus · Accepted Answer

Allocative efficiency occurs where the marginal cost (MC) curve intersects the demand curve (or the price line, since price represents marginal benefit to consumers). This point ensures that the price consumers are willing to pay is equal to the cost of producing an additional unit, maximizing total welfare.

Figure 10.17 -Refer to Figure 10.17.The Allocatively Efficient Output for the Firm