According to the profit-maximizing principle of marginal analysis,if the marginal benefit is _____ the marginal cost,_____.
A)more than;an activity should be reduced
B)less than;an activity should be reduced
C)equal to;an activity should be reduced
D)more than;net benefit is maximized

Question

Quizplus · Accepted Answer

DWhen the marginal benefit is less than the marginal cost (B), it indicates that the cost of producing one more unit of a good or service exceeds the benefit derived from it, suggesting that the activity should be reduced to maximize profit. Conversely, when the marginal benefit is more than the marginal cost (D), it implies that additional units of production or activity are still adding more to revenue than to costs, thus maximizing net benefit.

According to the Profit-Maximizing Principle of Marginal Analysis,if the Marginal