when does allocative efficiency happen 
the state of allocative efficiency happens when a firm produces the output for which the price is equal to the marginal cost of production the bottom lineallocational efficiency is the efficient allocation of resources that leads to maximum overall satisfaction in the economy allocative efficiency ensures that resources are used so that their marginal benefit to society is equal to their marginal cost for a firm or producer allocative efficiency happens when the price of the output is equal to the marginal cost of production correction july 31 2023 a previous version of this article inaccurately compared allocational efficiency to distributive efficiency the equitable distribution of resources the article was edited to clarify that allocation efficiency is the optimal distribution of goods in an economy to meet the needs and wants of society where marginal social cost is equal to the marginal social benefit 