Question

It is clear that productive inefficiency is a waste since resources are used in a way that produces less goods and services than a nation is capable of. Why is allocative inefficiency also wasteful?

Short answer

People will need to pay high prices for the dread and asked goods.

Step-by-step solution

:Concept Introduction

The asked combination is hard to determine

It's known that productive inefficiency is a waste. Allocative inefficiency is also extravagant because allocative effectiveness is nothing but one of the asked pack of society from productive effectiveness.

:Explanation

Hence, allocative inefficiency will also lead to product of unasked goods and lead to pile of unwanted goods and people will need to pay high prices for the dread and asked goods.