When marginal analysis is used to determine the optimal quantity of accident avoidance, all of the following are true except which one?

Question

Quizplus · Accepted Answer

When using marginal analysis to determine the optimal quantity of accident avoidance, the goal is to continue increasing accident avoidance (which is increasing the marginal cost) until the marginal benefit of accident avoidance (which is the reduction in the expected cost of an accident) equals the marginal cost. Therefore, statement D is false and should be eliminated as it suggests that the marginal benefit of accident avoidance exceeds the marginal cost, which would mean that more accident avoidance would be needed to reach the optimal point. Statement A, B, and C are all true statements, and it is important to consider all of them when determining the optimal quantity of accident avoidance.

When Marginal Analysis Is Used to Determine the Optimal Quantity