Given,MB = Marginal benefit and MC = Marginal cost.Then,for a positive decision variable in the optimal solution,which of the following relations holds? A)MB = MC = 0 B)MB - MC 0 C)MB - MC = 0 D)MB - MC

Question

Given,MB = Marginal benefit and MC = Marginal cost.Then,for a positive decision variable in the optimal solution,which of the following relations holds?
A)MB = MC = 0
B)MB - MC > 0
C)MB - MC = 0
D)MB - MC < 0
E)MB - MC ≠ 0

Quizplus · Accepted Answer

In an optimal solution, the marginal benefit equals the marginal cost (MB = MC) for a positive decision variable, ensuring that resources are allocated efficiently.

Given,MB = Marginal Benefit and MC = Marginal Cost