Marginal benefit always equals marginal cost at the activity level where total benefit equals total cost.

Question

Quizplus · Accepted Answer

Marginal benefit equals marginal cost at the optimal level of activity, not necessarily at the level where total benefit equals total cost. Total benefit equals total cost could occur at a level of activity where the marginal benefit and marginal cost are not equal, indicating that the activity level is not yet optimal.

Marginal Benefit Always Equals Marginal Cost at the Activity Level