The level of an economic activity should be increased to the point where the ____ is zero.
A)Marginal cost
B)Marginal benefit
C)Net marginal cost
D)Net marginal benefit

Question

Quizplus · Accepted Answer

The level of economic activity should be increased to the point where the net marginal benefit is zero. This means that the additional benefit gained from increasing the economic activity is equal to the additional cost incurred. At this point, further increases in the level of activity would result in a net cost to society. Therefore, it is optimal to stop increasing the level of economic activity at this point.

The Level of an Economic Activity Should Be Increased to the Point