Allocative efficiency is achieved when the production of a good occurs where

A) P = minimum ATC.
B) P = MC.
C) P = minimum AVC.
D) total revenue is equal to TFC.

Allocative Efficiency

A condition in which resources are distributed in such a way that no single person can be improved in their situation without negatively affecting another, thereby ensuring the optimum benefit for society.

Minimum ATC

Refers to the lowest point on the Average Total Cost curve, indicating the most efficient scale of production where the average cost per unit is minimized.

Minimum AVC

The lowest point on the average variable cost curve, indicating the most cost-efficient level of production output.