Market efficiency occurs when the margin of benefits of the last unit consumed is equal to the marginal cost of productivity.

Question

Quizplus · Accepted Answer

Market efficiency is achieved when the demand and supply of a good or service meet at a point where the price is equal to the marginal cost of production, resulting in the optimal allocation of resources. This is also known as allocative efficiency, where the price reflects the true value of the good or service and all consumers who are willing and able to pay the price get to consume it. At this point, the marginal benefit (the additional benefit received from consuming one more unit of the good or service) is equal to the marginal cost (the cost of producing one more unit of the good or service), resulting in market efficiency.

Market Efficiency Occurs When the Margin of Benefits of the Last