When there is allocative efficiency in a purely competitive market for a product, the minimum price producers are willing to accept is
A)less than marginal benefit.
B)greater than marginal cost.
C)equal to the amount of efficiency or deadweight losses.
D)equal to the maximum price consumers are willing to pay.

Question

Quizplus · Accepted Answer

In a purely competitive market, allocative efficiency is achieved when the price of a product is equal to the marginal cost of production, which is also the maximum price consumers are willing to pay. This ensures that resources are allocated in the most efficient manner, with no underproduction or overproduction relative to what consumers value.

When There Is Allocative Efficiency in a Purely Competitive Market