In a monopolistic market, which scenario best illustrates allocative efficiency?

Allocative efficiency in a monopolistic market occurs when the price of a product reflects the true cost of producing it, ensuring that resources are used in the best way possible. This means that the quantity of goods produced matches what consumers want at that price. For example, if a monopolist produces a certain number of toys and sells them at a price that equals the cost of making those toys, then resources are allocated efficiently. However, in most monopolistic situations, the monopolist often sets a higher price than the cost, leading to less production than what would be socially optimal. Therefore, allocative efficiency is achieved only when the monopolist adjusts their price to match production costs, allowing more consumers to benefit from the product.