Exhibit 14-3 Jira is searching for a big screen television.Exhibit 14-3 shows her marginal cost and marginal benefit from searching for the television.How many minutes should she search?

Question

Exhibit 14-3  Jira is searching for a big screen television.Exhibit 14-3 shows her marginal cost and marginal benefit from searching for the television.How many minutes should she search?

Quizplus · Accepted Answer

Jira should continue searching for the television as long as her marginal benefit is greater than or equal to her marginal cost. From the graph, we can see that her marginal benefit starts decreasing after 15 minutes, while her marginal cost increases steadily as she continues to search. Therefore, the best choice would be to search for 15 minutes.

Exhibit 14-3 Jira Is Searching for a Big Screen