The Necessary Condition for Allocative Efficiency Is That Each Commodity

Multiple Choice

The necessary condition for allocative efficiency is that each commodity be produced in an amount that makes the marginal benefit to society of the last unit produced equal to the marginal cost to society of that last unit. The satisfaction of this condition in a market economy relies on the assumptions of:

A) utility maximization, profit maximization, and perfect competition.
B) utility maximization and profit maximization, but not perfect competition.
C) profit maximization and perfect competition, but not utility maximization.
D) utility maximization and perfect competition, but not profit maximization.