The decision rule for constrained optimization is to select the level for each activity at which
A)marginal benefit equals marginal cost for each activity.
B)total benefit equals total cost for each activity.
C)marginal benefit per dollar of marginal cost is equal across all activities.
D)total benefit per dollar of total cost is equal across all activities.

Question

Quizplus · Accepted Answer

The decision rule for constrained optimization, particularly in the context of allocating limited resources among competing activities, is to ensure that the marginal benefit per dollar of marginal cost is equal across all activities. This ensures the most efficient use of resources, maximizing the overall benefit given the constraints.

The Decision Rule for Constrained Optimization Is to Select the Level