An allocatively efficient market is a situation where resources are allocated in the most optimal way to maximize social welfare. This occurs when the marginal benefit equals the marginal cost.
Related terms
Marginal Benefit: The additional benefit gained from consuming or producing one more unit of a good or service.
Marginal Cost: The additional cost incurred from consuming or producing one more unit of a good or service.
Social Welfare: The overall well-being and happiness of society as a whole.