Allocative efficiency occurs when every good or service is produced up to the point where the last unit provides________.
A)a marginal benefit to society equal to the marginal cost of producing it.
B)a marginal benefit to society greater than the marginal cost of producing it.
C)a marginal benefit to society less than the marginal cost of producing it.
D)a marginal benefit to society equal to zero.

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to its marginal cost of production. This is considered to be the optimal level of production from a societal perspective, as the benefits and costs are balanced and resources are allocated efficiently.

Allocative Efficiency Occurs When Every Good or Service Is Produced