At the output level defining allocative efficiency:

A) the areas of consumer and producer surplus necessarily are equal.
B) marginal benefit exceeds marginal cost by the greatest amount.
C) consumer surplus exceeds producer surplus by the greatest amount.
D) the maximum willingness to pay for the last unit of output equals the minimum acceptable price of that unit of output.

Allocative Efficiency

A state of the economy in which production represents consumer preferences; every good or service is distributed to meet the desires of consumers.

Consumer Surplus

Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually do pay.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, typically measured as the area above the supply curve and below the market price.