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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
10-26-2009 08:16:03
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The contents of this article is licensed from www.wikipedia.org under the GNU Free Documentation License. Click here to see the transparent copy and copyright details


