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What is the relationship between the marginal benefit of consuming a good and the overall satisfaction or utility derived from that consumption?
The relationship between the marginal benefit of consuming a good and the overall satisfaction or utility derived from that consumption is that as you consume more of a good, the marginal benefit decreases while the overall satisfaction or utility increases at a decreasing rate. This is known as the law of diminishing marginal utility.
If you have total cost and total benefit how do you get marginal cost and marginal benefit?
Marginal cost is total cost/quantity Marginal benefit is total benefit/quantity
As an individual consumes more of a product within a given period of time it is likely that each additional unit consumed will yield?
Diminishing returns. This means that the marginal utility of each additional unit consumed will decrease, and the individual will derive less satisfaction or benefit from consuming each subsequent unit.
When does marginal benefit occur?
Marginal benefit 'occurs' for any benefit (price) function, since a marginal term is simply the first-order derivative of its parent function. Marginal benefit is strictly greater than zero only when a benefit function is always increasing in total benefit over its domain.
How does the marginal benefit from agood change as the quantity produced of the good increase?
As the quantity produced of a good increases, the marginal benefit typically decreases due to the principle of diminishing marginal utility. Consumers derive less additional satisfaction from each additional unit consumed, leading them to value each subsequent unit less than the previous one. Consequently, the marginal benefit of producing more of the good declines as supply increases. This relationship can influence pricing and production decisions in the market.
How does the marginal benefit curve illustrate the relationship between the quantity consumed and the additional satisfaction gained from consuming one more unit of a good or service?
The marginal benefit curve shows how the additional satisfaction gained from consuming one more unit of a good or service decreases as the quantity consumed increases. This illustrates the law of diminishing marginal utility, which states that as consumption increases, the additional benefit from each additional unit consumed decreases.
Do diminishing returns necessarily mean economic inefficiency?
No, diminishing returns do not necessarily mean economic inefficiency. By contrast, diminishing returns usually create a condition where a marginal benefit = marginal cost condition is achieved and results in a stable, non-infinite equilibrium. It would be inefficient to produce over or under this equilibrium, but the nature of production functions do not ensure inefficiency.
What is the equation for marginal net benefits?
Marginal net benefits= Marginal benefit- Marginal cost
What is the optimal level of pollution?
when marginal benefit is equal to marginal cost To be more specific: When the marginal damage cost of polluting is equal to the marginal abatement cost of polluting (or the marginal benefit of polluting, which is equivalent to the MAC)
What are typical shapes of marginal-benefit curves?
Marginal Benefit curve is usually downward sloping, while Marginal Cost is usually upward sloping.
The marginal benefit of an activity is?
The marginal benefit of an activity refers to the additional satisfaction or utility gained from consuming or engaging in one more unit of that activity. It is a crucial concept in economics, as it helps individuals and businesses make informed decisions by comparing the marginal benefits to the marginal costs. When the marginal benefit exceeds the marginal cost, it is generally advantageous to pursue the activity further. Conversely, if the marginal cost surpasses the marginal benefit, it may be wise to reduce or cease the activity.
Is the marginal benefit of a glass of water large or small?
water is necessary for life, is the marginal benefit of water is large or small?
