Asked by Kawinthida Kanajoth on Jul 23, 2024
Verified
The term allocative efficiency refers to
A) the level of output that coincides with the intersection of the MC and AVC curves.
B) minimization of the AFC in the production of any good.
C) the production of the product mix most desired by consumers.
D) the production of a good at the lowest average total cost.
Allocative Efficiency
A state of the economy in which production represents consumer preferences; in other words, every good or service is produced up to the point where the last unit provides a benefit to consumers exactly equal to the cost of producing it.
Product Mix
The total range of products that a company offers for sale, encompassing different lines, variations, and services to meet consumer needs.
- Understand the principles of allocative and productive efficiency within various market frameworks.
- Comprehend the importance of enhancing both consumer surplus and producer surplus for economic well-being.
Verified Answer
AB
Andrea ByrnesJul 27, 2024
Final Answer :
C
Explanation :
Allocative efficiency occurs when resources are distributed in a way that the production aligns with consumer preferences, meaning the goods and services produced are those most desired by consumers.
Learning Objectives
- Understand the principles of allocative and productive efficiency within various market frameworks.
- Comprehend the importance of enhancing both consumer surplus and producer surplus for economic well-being.