Allocative efficiency occurs where the collective sum of consumer and producer surplus is at a maximum.

Name: Allocative efficiency occurs where the collective sum of consumer and producer surplus is at a maximum.
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Allocative efficiency is achieved when the goods and services are distributed according to consumer preferences, meaning that the resources are allocated in the most efficient way possible, maximizing the total welfare or the sum of consumer and producer surplus.

Allocative Efficiency Occurs Where the Collective Sum of Consumer and Producer