The situation that occurs when no resources are wasted – when no one can be made better off without making someone else worse off.
The condition that exists when firms produce the output that is most preferred by consumers.
Occurs where resources are allocated to their highest value usage. An important condition for allocative efficiency is that those who value a product more than the additional cost of producing it are provided with it, and those who value a product less than the additional cost of producing it are not provided with it.
Obtaining the most consumer satisfaction from the resources which are available. When allocative efficiency is attained, the economy is doing the best job possible of satisfying unlimited wants with limited resources. Contrast with technical efficiency.
the allocation of resources to their most (market-) valued uses
Using society's scarce resources to produce in the proper quantities the products that consumers value most.
The use of resources to produce those goods and services most wanted by consumers.
Allocative efficiency is the market condition whereby resources are allocated in a way that maximizes the net benefit attained through their use. Allocative efficiency refers to a situation in which the limited resources of a country are allocated in accordance with the wishes of consumers. An allocatively efficient economy produces an "optimal mix" of commodities.