If the marginal benefit were greater than the cost of a good:
A) consumers could increase their utility by buying more.
B) consumers could increase their utility by buying less.
C) producers should decrease production.
D) social net benefit would be maximized.

Question

Quizplus · Accepted Answer

If the marginal benefit (MB) is greater than the cost of a good, it means that the consumer is getting more satisfaction from the last unit of the good consumed than what they paid for it. In such a case, consumers should increase their consumption of the good since it will lead to an increase in their overall utility. This is because the additional satisfaction gained from the consumption of the good is greater than the cost incurred to acquire it. Therefore, choice A is the best choice.

If the Marginal Benefit Were Greater Than the Cost of a Good