According to the No Marginal Improvement Principle,if X* is the best choice,then
A) MB must be no greater than MC at X* or else a small increase in the activity would increase net benefits
B) MB must be no greater than MC at X* or else a small decrease in the activity would increase net benefits
C) MB must be no less than MC at X* or else a small increase in the activity would increase net benefits
D) The difference between MB and MC must be as great as possible

Question

Quizplus · Accepted Answer

The No Marginal Improvement Principle suggests that for an optimal choice X*, the Marginal Benefit (MB) must be no greater than the Marginal Cost (MC) at X*. If MB were greater than MC, a small increase in the activity level would still increase net benefits, indicating that X* is not the optimal choice.

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