Allocative efficiency occurs when: MB = MC.

Here's a step-by-step explanation:

1. Allocative efficiency is a state of the economy in which production represents consumer preferences. In other words, it occurs when every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing.

2. MB stands for Marginal Benefit. This is the additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.

3. MC stands for Marginal Cost. This is the increase in total cost that arises from an extra unit of production.

4. Therefore, when the marginal benefit (MB) equals the marginal cost (MC), it means that resources are allocated in the most efficient way. This is because the cost of producing an additional unit of output is exactly equal to

Question

Allocative efficiency occurs when: MB = MC.

Here's a step-by-step explanation:

1. Allocative efficiency is a state of the economy in which production represents consumer preferences. In other words, it occurs when every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing.

2. MB stands for Marginal Benefit. This is the additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.

3. MC stands for Marginal Cost. This is the increase in total cost that arises from an extra unit of production.

4. Therefore, when the marginal benefit (MB) equals the marginal cost (MC), it means that resources are allocated in the most efficient way. This is because the cost of producing an additional unit of output is exactly equal to

Knowee AI · Accepted Answer

Allocative efficiency occurs when: MB = MC.

Here's a step-by-step explanation:

1. Allocative efficiency is a state of the economy in which production represents consumer preferences. In other words, it occurs when every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing.

2. MB stands for Marginal Benefit. This is the additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.

3. MC stands for Marginal Cost. This is the increase in total cost that arises from an extra unit of production.

4. Therefore, when the marginal benefit (MB) equals the marginal cost (MC), it means that resources are allocated in the most efficient way. This is because the cost of producing an additional unit of output is exactly equal to

Allocative efficiency occurs when:Multiple choice question.MP = MC.MB = MP.Price = Output.MB = MC.

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Allocative efficiency occurs when:

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