According to the No Marginal Improvement Principle,if X* is the best choice then at X* it must always be true that: A) either MB = MC or the activity X is not finely divisible. B) either MB ≠ MC or the activity X is not finely divisible. C) either MB MC. D) MB = MC.

Question

According to the No Marginal Improvement Principle,if X* is the best choice then at X* it must always be true that:
A) either MB = MC or the activity X is not finely divisible.
B) either MB ≠ MC or the activity X is not finely divisible.
C) either MB < MC or MB > MC.
D) MB = MC.

Quizplus · Accepted Answer

The No Marginal Improvement Principle suggests that for an optimal choice X*, the marginal benefit (MB) must equal the marginal cost (MC) if the activity is finely divisible, meaning it can be adjusted in very small increments. If the activity is not finely divisible, this precise equality might not be achievable, but the principle still guides the decision towards the best available choice.

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