In a functioning market,people will buy a good up to the point where:
A) the marginal benefit of each unit is equal to the marginal cost of each unit.
B) the total benefit of the good is equal to the total cost of the good.
C) the marginal benefit of the last unit is equal to the marginal cost of that unit.
D) they can no longer afford it.

Question

Quizplus · Accepted Answer

In a functioning market, consumers will continue to purchase a good as long as the marginal benefit (the additional benefit gained from consuming one more unit of the good) is greater than or equal to the marginal cost (the additional cost of producing one more unit of the good). Once the marginal benefit of the last unit consumed is equal to the marginal cost of that unit, consumers will no longer be willing to pay for additional units, since the cost will outweigh the benefit. Therefore, the correct choice is C: the point where the marginal benefit of the last unit is equal to the marginal cost of that unit.

In a Functioning Market,people Will Buy a Good Up to the Point