why-does-the-equality-of-marginal-benefit-and-marginal-cost-lead-to-allocative-e

Question

Why does the equality of marginal benefit and marginal cost lead to allocative efficiency?

Accepted Answer

It ensures that resources are allocated according to consumer preferences.

Answer

It ensures that the average total cost is minimized.

Answer

It ensures that the price is equal to the average revenue.

Answer

It ensures that firms maximize their profits.