Which of the following best defines market efficiency?

Market efficiency is best defined as the optimal allocation of resources. This concept refers to a situation where resources are distributed in such a way that they are being utilized to their fullest potential, leading to the maximum possible output of goods and services. In an efficient market, all available information is reflected in the prices of goods and services, and resources are allocated based on consumer preferences and demand.

This optimal allocation ensures that no one can be made better off without making someone else worse off, which is a condition known as Pareto efficiency. An efficient market maximizes total welfare and ensures that goods and services reach those who value them most, thereby promoting overall economic productivity and growth.

Other options such as maximizing profits at all costs could lead to inefficiency if it disregards factors like externalities or resource inputs. Equal distribution of goods, while socially desirable in some contexts, does not necessarily mean that resources are allocated efficiently. Lastly, government-assisted pricing can distort the market by setting prices that do not reflect true supply and demand, potentially leading to misallocation of resources.