The Canadian economy is achieving allocative efficiency if

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when resources are allocated in a way that maximizes social welfare, which is achieved when marginal cost equals price in all industries. This ensures that the price consumers are willing to pay for a good or service is equal to the cost of producing it, thereby eliminating any deadweight loss or inefficiencies. Therefore, option D is the correct answer. Options A, B, C, and E do not necessarily ensure allocative efficiency as they do not address the relationship between price and cost in the economy.

The Canadian Economy Is Achieving Allocative Efficiency If