Allocative Efficiency : Optimal Pricing :: Market Monopoly : ?

Allocative efficiency happens when resources are distributed in a way that maximizes the overall satisfaction of society. This means that goods and services are produced and sold at prices that reflect their true value to consumers. In a market monopoly, where one company controls the entire supply of a product, the pricing is often higher than in competitive markets, leading to less satisfaction for consumers. For example, if a single company sells electricity in a town and charges a high price, people may not be able to afford enough electricity, resulting in a loss of overall happiness. Therefore, the relationship can be understood as Market Monopoly : Inefficiency, because monopolies often fail to achieve the allocative efficiency seen in competitive markets.