Refer to the following table: The optimal level of activity is:
A)2
B)3
C)4
D)5
E)There is no optimal level in this case because marginal benefit does not equal marginal cost at any activity level.

Question

Refer to the following table:  The optimal level of activity is:
A)2 
B)3 
C)4 
D)5 
E)There is no optimal level in this case because marginal benefit does not equal marginal cost at any activity level.

Quizplus · Accepted Answer

At activity level 4, marginal benefit equals marginal cost, which is the optimal level of activity. At this level, the net benefit is maximized. Any activity level below or above 4 will result in lower net benefit.

Refer to the Following Table: the Optimal Level of Activity