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"On July 8, 2010, LeBron James, a star in the National Basketball Association, announced that he was going to sign with the Miami Heat. The Heat was not the team that was willing to pay the most for LeBron's
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"On July 8, 2010, LeBron James, a star in the National Basketball Association, announced that he was going to sign with the Miami Heat. The Heat was not the team that was willing to pay the most for LeBron's services, but it acquired him anyway. This is a violation of:"

User Steve Hibbert
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7 votes

Answer:

Allocative Efficiency

Step-by-step explanation:

Allocative efficiency takes place when the consumer's preference towards a particular good is the most which are measured by their willingness to pay to get it. This leads to achieving the optimum distribution.

In the given scenario, allocative efficiency is violated as Miami Heat is going to sign their desired product i.e. LeBron James who is a star player but they were not willing to pay the maximum to get him and rather got him anyway. Thus, the optimal distribution is not achieved.

User Sweepster
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