Which of the following is true about marginal benefit?
A) A consumer's marginal benefit is equal to the height of her demand curve.
B) Consumers will continue to purchase up until the point where marginal benefit equals price.
C) Marginal benefit declines as consumption increases because of the law of diminishing marginal utility.
D) All of the above are true.

Question

Quizplus · Accepted Answer

A) Marginal benefit is measured by the willingness to pay for an additional unit of a good, so it is equal to the height of the demand curve. 
B) Consumers will continue to purchase as long as marginal benefit is greater than or equal to price, but once marginal benefit equals price, they will stop purchasing because they no longer see the additional unit as worth it. 
C) Marginal benefit decreases as consumption increases due to the law of diminishing marginal utility, which means that each additional unit provides less additional satisfaction than the previous one.

Which of the Following Is True About Marginal Benefit