According to the marginal principle,a rational firm will introduce a movie sequel as long as
A) marginal benefit exceeds marginal cost.
B) marginal benefit is less than marginal cost.
C) marginal benefit equals marginal cost.
D) total benefit equals total cost.

Question

Quizplus · Accepted Answer

According to the marginal principle, a rational firm will introduce a movie sequel as long as the marginal benefit (the additional benefit received from producing one more unit of the sequel) exceeds the marginal cost (the cost of producing one more unit of the sequel). Therefore, if the marginal benefit is greater than the marginal cost, the firm should introduce the movie sequel.

According to the Marginal Principle,a Rational Firm Will Introduce a Movie