Resource use is allocatively efficient
A) when marginal benefit equals marginal cost.
B) when the maximum possible quantity is being produced.
C) whenever marginal benefit exceeds marginal cost.
D) whenever marginal cost exceeds marginal benefit.

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when resources are allocated in a way that maximizes the overall benefit to society. This occurs when the marginal benefit of producing a good or service equals its marginal cost. Therefore, option A is the correct choice.

Resource Use Is Allocatively Efficient