Allocative efficiency

Allocative efficiency is a state of the economy in which production is aligned with the preferences of consumers and producers; in particular, the set of outputs is chosen so as to maximize the social welfare of society.^[1] This is achieved if every produced good or service has a marginal benefit equal to the marginal cost of production.

^ Anderson, D. (2019). Environmental Economics and Natural Resource Management, [1] Routledge, New York.

[1] Anderson, D. (2019). Environmental Economics and Natural Resource Management, [1] Routledge, New York.

[1]