According to the No Marginal Improvement Principle,if X* is the best choice,then:
A) MB must be greater than MC at X*.
B) MB must be equal to MC at X*.
C) MB must be less than MC at X*.
D) MB must be greater than or equal to MC at X*.

Question

Quizplus · Accepted Answer

The No Marginal Improvement Principle states that the best choice is where marginal benefit (MB) is equal to marginal cost (MC), as any other choice would result in a decrease in net benefit. Therefore, the correct choice is where MB=MC, which is option B.

According to the No Marginal Improvement Principle,if X* Is the Best