What typically happens to benefits as the amount of an activity is increased?
A) Total benefits remain constant.
B) Marginal benefit increases.
C) Marginal benefit remains constant.
D) Marginal benefit decreases.
E) The marginal benefit changes only if the marginal cost changes.

Question

Quizplus · Accepted Answer

According to the law of diminishing marginal utility, as the amount of an activity is increased, the marginal benefit of each additional unit decreases. Therefore, the best choice is D, which states that the marginal benefit decreases.

What Typically Happens to Benefits as the Amount of an Activity