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In economic analysis,at the optimal quantity of an activity:
A) marginal benefit exceeds marginal cost by the greatest amount.
B) total benefit equals total cost.
C) marginal benefit equals total benefit.
D) total benefit exceeds total cost by the greatest amount and marginal benefit equals marginal cost.
Optimal Quantity
The quantity that generates the highest possible total profit.
Economic Analysis
The systematic approach to determining the optimum use of scarce resources, involving comparison of two or more alternatives in achieving a specific objective under the given assumptions and constraints.
Marginal Benefit
The additional benefit obtained from consuming one more unit of a product or service.
- Investigate the relationship between the quantity of an activity and the total benefit derived.
- Acquire knowledge on the association between marginal cost and marginal benefit in realizing maximum profit or utility.
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Learning Objectives
- Investigate the relationship between the quantity of an activity and the total benefit derived.
- Acquire knowledge on the association between marginal cost and marginal benefit in realizing maximum profit or utility.
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