how-does-the-condition-where-price-equals-marginal-cost-affect-allocative-effici

Question

How does the condition where price equals marginal cost affect allocative efficiency in a perfectly competitive market?

Accepted Answer

It ensures that resources are allocated to their most valued use.

Answer

It has no impact on allocative efficiency.

Answer

It leads to underproduction of goods.

Answer

It results in overproduction of goods.