Economists believe that optimal decisions are made up to the point where
A) marginal benefit is zero.
B) marginal cost is zero.
C) marginal benefits are greater than marginal costs.
D) marginal costs are greater than marginal benefits.
E) marginal benefits are equal to marginal costs.

Question

Quizplus · Accepted Answer

Economists believe that optimal decisions are made up to the point where marginal benefits are equal to marginal costs. This is because this point represents the maximum net benefit that can be obtained from a decision. At this point, any further increase in benefits would come at a higher marginal cost, and any decrease in costs would result in a lower marginal benefit, making the decision suboptimal.

Economists Believe That Optimal Decisions Are Made Up to the Point