Allocative efficiency occurs when:
A) production is allocated equally among all citizens.
B) people who wants a product the most gets it.
C) goods are produced at the lowest possible cost.
D) resources are equally allocated between the private and public sectors of the economy.

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when goods are allocated to those who value them the most or are willing to pay the highest price for them. It is not about equal allocation or lowest cost of production. Allocative efficiency is essential for the economy to function optimally and for resources to be allocated efficiently.

Allocative Efficiency Occurs When