It is impossible to have a conflict between allocative efficiency and production efficiency.

Question

Quizplus · Accepted Answer

Allocative efficiency means producing the optimal quantity of goods and services based on consumer demand and preferences. Production efficiency means using the fewest possible resources to produce a given level of output. These two types of efficiency can sometimes conflict, as producing more of a certain good to satisfy demand may not be the most efficient use of resources. For example, producing more luxury cars may satisfy consumer demand, but it may not be the most efficient use of resources if there is a shortage of basic necessities such as food and housing.

It Is Impossible to Have a Conflict Between Allocative Efficiency