allocative efficiency

Definitions

Economics

  • noun the action of satisfying as far as is possible customer demands for goods and services by pricing them at a price which is near to the production cost while still allowing a margin to the producer. If a market is allocatively efficient it produces the right amount of goods at the right prices for the right customers.

Health Economics

  • (written as Allocative Efficiency)
    A situation in which resources are allocated to production processes and the outputs of those processes to consumers or clients so as to maximize the net benefit to society. Pareto efficiency is a specific form of it.
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