Refer to the table below. According to the Cost-Benefit Principle, how many units of this activity should be carried out?

Question

Quizplus · Accepted Answer

Three units of this activity provide a net benefit (total benefit - total cost) of $18, which is the highest of all the options given. Also, note that marginal benefit is greater than marginal cost for the first three units, but marginal benefit is less than marginal cost for units 4, 5, 6 and 7.

Refer to the Table Below