Question

You discover that many consumers want easy access to pens in their cars, so you decide to produce a steering wheel that has a pen tucked inside that can conveniently pop out whenever someone needs it. The steering wheels become very popular with car companies. Developing this product is an example of what

Answer 1

Answer: c. Allocative efficiency

Explanation:

When an economy is experiencing allocative efficiency, it means that goods in the economy are being produced according to consumer preferences. This means that if consumers want a certain good in a certain quantity, the economy will produce that good in that quantity.

This is the case here. You saw that consumers wanted a good and you went ahead and produced it therefore giving consumers what they wanted.