vonny101
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#1
Right, coming up to exams now just want to get a few definitions and theories 100% clear!

I roughly know what allocative efficiency is but still don't know how to explain or get those full marks on a OCR paper when it asks what it is?

Could someone please explain what allocative efficiency is in a stupidly simple eco way!

Cheers guys
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PaulKrugman
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https://www.youtube.com/watch?v=9a3wXj1o91k
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samboJ
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Where there is no dead-weight loss. (Total economic welfare is maximised) (P=MC; AR=MC)
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SweatyGoldfish
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The definition we've been taught is:

''When scarce resources are used to produce the goods and services consumers actually demand.''
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Mav455
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Allocative efficiency is when Price is equal to Marginal Cost. Its more common in Perfect Competition who do not have the power to set the market prices, but not in Monopolies, who may exploit consumers by setting a price higher than Marginal Cost.
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blackswan1
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Allocative efficiency is when the market operates at equilibrium where there is no wastage, shortage or surplus of resources from society's point of view.


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katiexmc
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Where demand and supply are in equilibrium and consumer satisfaction is maximised.


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May-o2q
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allocative efficiency is where consumer satisfaction is maximised. you got one mark from mentioning consumer satisfaction and another mark for maximised. this is according to an OCR mark scheme. there usually only 2 marks available for this type of question.
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