Allocative Efficiency

This video discusses the concept of allocative efficiency. While any point along the Production Possibilities Frontier is efficient in production, only one of these points best corresponds to the wants and desires of consumers. This point exhibits allocative efficiency, and it is where the marginal benefit of an additional unit of a good equals its marginal cost. Also, it is the point where an indifference curve is tangent to the PPF.
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[@gsrinivasarao5286]

What if society demanded only 5 food and 1 clothing which is below PPF.Is this point still allocatively efficient?

[@gollavillihari2516]

What if society demanded output below PPF. Is this allocatively inefficient?