Asked by Deneatra Caesar on Jul 04, 2024
Verified
Whenever marginal benefit is less than marginal cost,the decision maker should do _____ of the activity.
A) less
B) that exact amount
C) more
D) none
Marginal Benefit
The additional satisfaction or utility gained from consuming or producing one more unit of a good or service.
Marginal Cost
The cost of producing one additional unit of a product or service, which varies depending on the level of production.
- Apply the tenets of marginal analysis to a range of situations to discern the optimal decision paths.
Verified Answer
SS
SUBHVRAT SHARMAJul 10, 2024
Final Answer :
A
Explanation :
When marginal benefit is less than marginal cost, it means that the activity is costing more than what it is yielding in benefits. This indicates that the decision maker should do less of the activity as it will result in a net loss.
Learning Objectives
- Apply the tenets of marginal analysis to a range of situations to discern the optimal decision paths.