Economics · Market Efficiency

Which of the following conditions defines allocative efficiency?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1Zero economic profit condition
2Profit maximization condition only
3Marginal revenue equals marginal cost (MR = MC)
4Price equals marginal cost (P = MC)✓

Correct answer

Price equals marginal cost (P = MC)

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Which of the following conditions defines allocative efficiency?

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Which of the following conditions defines allocative efficiency?

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