The best method to satisfy customer demand for the products and services is to produce them such that marginal benefit equals marginal cost is known as Allocative efficiency.
Allocational or allocative Efficiency is the quality of a market where all products and services are efficiently divided among consumers in an economy. It happens when parties can use the precise and easily accessible information represented in the market to decide how to employ their resources.
When market data is openly available to all market players, allocation efficiency happens. It enables them to decide what to buy or create and in what amounts after doing their research. For example, 10 clients are asking for frosted doughnuts from a baker. There is allocative efficiency since the baker produced precisely 10 that morning.
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