Question

At equilibrium in a perfectly competitive market: allocative efficiency is achieved because the sum of consumer and producer surplus is maximized the sum of consumer and producer surplus is minimized and allocative efficiency occurs because the sum of consumer and producer surplus is zero, allocative efficiency does not occur because the sum of consumer and producer surplus is minimized, allocative efficiency does not occur the sum of consumer and producer surplus is zero and allocative efficiency occurs

Answer 1

Allocative efficiency is achieved when the quantity consumers plan to buy matches the quantity producers are planning to sell, which essentially means the market is in equilibrium. Therefore, allocative efficiency is achieved when consumer and producer surplus are maximized.