Allocative efficiency

Allocative efficiency is the market condition whereby resources are allocated in a way that maximises the net benefit attained through their use. Allocative efficiency is also defined as the production of the quantity that is most beneficial to society. A firm is allocatively efficient when its price is equal to its marginal costs (that is, P = MC).

See also: Pareto efficiency


References

allocative efficiency (http://www.woodgreen.oxon.sch.uk/economics/allocative_efficiency.htm)


fi:Allokointitehokkuus

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