Allocativ

Allocativ, sometimes written allocativ, is a term used in economic discussions to refer to allocative efficiency in the distribution of scarce resources among competing uses. In this sense, allocative efficiency describes a state in which the mix of goods and services produced and consumed aligns with consumer preferences, and the price system signals the most valued uses of resources. In standard microeconomic theory, allocative efficiency for a good is achieved when the price equals the marginal cost of production (P = MC) and resources are allocated so that no reallocation could make someone better off without making someone worse off, a condition closely related to Pareto efficiency under perfect competition.

Real-world economies rarely attain perfect allocative efficiency because of factors such as externalities, public goods, information asymmetries, market power, and transaction costs. Prices may not fully reflect social costs or benefits, leading to over- or under-allocation of certain resources. Policy tools such as taxes, subsidies, regulation, or public provision are sometimes used to correct these market failures and guide the economy toward a more efficient allocation of resources.

Note that allocativ is not a universally standard term; in most texts the concept is described as allocative efficiency rather than allocativ. The term may appear in informal discussions or as a brand name, but its use in formal literature is limited. See also allocative efficiency, productive efficiency, Pareto efficiency, and welfare economics.