When there is no cost for a good or activity, net benefit is maximized where marginal benefit is:
A) zero.
B) maximized.
C) less than zero.
D) greater than zero.

Question

Quizplus · Accepted Answer

When there is no cost for a good or activity, net benefit is maximized where marginal benefit is zero. This is because, in the absence of any cost, the benefit derived from consuming or engaging in an activity increases up to the point where the additional (marginal) benefit from consuming one more unit is zero. At this point, the total benefit is maximized because consuming more would not add any additional benefit.

When There Is No Cost for a Good or Activity