What characterizes perfectly inefficient rationing?

Perfectly inefficient rationing occurs when goods are distributed in a manner that undermines overall consumer benefit, specifically leading to a scenario where the lowest value consumers obtain the goods instead of those who value them most. In this context, consumer surplus—essentially the difference between what consumers are willing to pay and what they actually pay—is significantly reduced because the goods are allocated to individuals who derive less value from them.

This misallocation results in a society where total welfare is not maximized; instead, the goods end up in the hands of those who may not benefit from them as much as higher-value consumers would. Consequently, consumer surplus diminishes, illustrating the inefficiency of such a rationing system. In stark contrast, other methods of allocation may either distribute goods more equitably or favor those who appreciate the goods more, but the defining feature of perfectly inefficient rationing is its tendency to favor the lowest value participants at the expense of maximizing overall satisfaction.