According to the No Marginal Improvement Principle for Boundary Choices,if X* is a best choice,then A) If only a marginal increase in the activity level is possible, the MB = MC at X* C) If only a marginal decrease in the activity level is possible, the MB

Question

According to the No Marginal Improvement Principle for Boundary Choices,if X* is a best choice,then
A) If only a marginal increase in the activity level is possible, the MB <= MC at X*
B) If only a marginal increase in the activity level is possible, the MB >= MC at X*
C) If only a marginal decrease in the activity level is possible, the MB <= MC at X*
D) MB = MC at X*

Quizplus · Accepted Answer

The No Marginal Improvement Principle states that if X* is a best choice, then at X*, the marginal benefit (MB) should be less than or equal to the marginal cost (MC) if only a marginal increase in the activity level is possible, indicating no further improvement can be made by increasing the activity.