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Whenever Marginal Benefit (MB) = Marginal Cost (MC), the decision maker should do _____ of the...

Whenever Marginal Benefit (MB) = Marginal Cost (MC), the decision maker should do _____ of the activity.

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Answer #1

When the marginal benefit is equal to the marginal cost the profit are maximized as well as there is optimal production of the goods and services. So the the firm or the decision maker will not do any more or less of the activity and he should do the same amount of activities. A better decision is made looking at the margin, the marginal cost is the additional cost when an additional unit of the activity is produced. The marginal benefit is the additional benefit derived when an additional unit of the activity is produced.

Ans: The same amount of activity.

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