Which of the following describes a situation in which every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing it?
A) Productive efficiency
B) Allocative efficiency
C) Marginal efficiency
D) Profit maximisation

Question

Quizplus · Accepted Answer

Allocative efficiency is achieved when resources are allocated in such a way that every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing it. This ensures that the maximum level of satisfaction is achieved for consumers and resources are used in the most efficient manner. Productive efficiency refers to a situation where goods and services are produced at the lowest cost possible, while profit maximisation is the goal of firms to maximise their profits. Marginal efficiency is not a standard economic term.

Which of the Following Describes a Situation in Which Every