Marginal analysis involves undertaking an activity
A)until its marginal costs start declining.
B)only when its marginal benefits are positive.
C)until its marginal benefits equal marginal costs.
D)only if its marginal costs are greater than its marginal benefits.

Question

Quizplus · Accepted Answer

Marginal analysis involves comparing the marginal benefits and marginal costs of an activity. The optimal level of the activity is reached when the marginal benefits are equal to the marginal costs. Therefore, the activity should be undertaken until its marginal benefits equal its marginal costs (choice C).

Marginal Analysis Involves Undertaking an Activity