In a perfectly competitive market, how does the price elasticity of demand affect the allocative efficiency when marginal benefit equals marginal cost?

In a perfectly competitive market, allocative efficiency occurs when resources are distributed in a way that maximizes total benefit to society. This happens when the price consumers are willing to pay for a good, which reflects their marginal benefit, equals the marginal cost of producing that good. If the price elasticity of demand is high, it means that consumers are very responsive to price changes. For example, if a small increase in price leads to a large drop in quantity demanded, producers need to be careful about setting prices too high, as they may lose many customers. Therefore, when marginal benefit equals marginal cost, a high price elasticity of demand can help ensure that resources are used efficiently, as it encourages producers to keep prices near the marginal cost, leading to optimal production levels.