In a monopoly market, how does allocative efficiency relate to producer surplus when compared to a perfectly competitive market?

Allocative efficiency occurs when resources are distributed in a way that maximizes the total benefit to society. In a perfectly competitive market, prices reflect the true cost of production, leading to both consumer and producer surplus being maximized. However, in a monopoly, the single producer can set higher prices because there are no competitors, which often leads to a decrease in consumer surplus and overall allocative efficiency. For example, if a monopolist sells a product for $10, while the cost of production is $5, they earn more profit (producer surplus), but fewer consumers may be able to buy the product at that price. This situation shows that while the monopolist gains more producer surplus, the overall benefit to society is lower than in a competitive market, where prices would be closer to the cost of production.