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If the marginal benefit is greater than the marginal cost, it indicates that the additional benefit gained from an action outweighs the additional cost incurred. This scenario suggests that the action is economically favorable and should be pursued, as it leads to an overall increase in welfare or profit. Consequently, decision-makers are likely to continue with the action until the marginal benefits and marginal costs become equal.
What else can I help you with?
When the marginal social cost is greater than the marginal social benefit what happens?
inefficient overproduction
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
What is the relationship between marginal cost and benefit in decision-making processes?
The relationship between marginal cost and benefit in decision-making processes is that individuals or businesses should continue an activity as long as the marginal benefit exceeds the marginal cost. This means that the additional benefit gained from one more unit of an activity should be greater than the additional cost incurred. By comparing these two factors, decision-makers can determine the optimal level of output or resource allocation.
What is the equation for marginal net benefits?
Marginal net benefits= Marginal benefit- Marginal cost
What should the firm do if marginal revenue is greater than marginal cost?
If a firm's marginal revenue is greater than its marginal cost, it should increase production to maximize profits.
When the marginal social cost is greater than the marginal social benefit what happens?
inefficient overproduction
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
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 is the relationship between marginal cost and benefit in decision-making processes?
The relationship between marginal cost and benefit in decision-making processes is that individuals or businesses should continue an activity as long as the marginal benefit exceeds the marginal cost. This means that the additional benefit gained from one more unit of an activity should be greater than the additional cost incurred. By comparing these two factors, decision-makers can determine the optimal level of output or resource allocation.
What is the equation for marginal net benefits?
Marginal net benefits= Marginal benefit- Marginal cost
What should the firm do if marginal revenue is greater than marginal cost?
If a firm's marginal revenue is greater than its marginal cost, it should increase production to maximize profits.
Application of calculus to business decision process?
Microeconomics, which determines much of the business decision process, looks to the margin for much of its data. What is the marginal cost of producing one more piece of output? What is the marginal cost of hiring one more employee? What is the marginal benefit of opening another store? In other words, the business decision process is not concerned with the total cost of producing all its units as much as producing just one more. In this sense, the margin is the derivative of the total cost. When the marginal benefit of something is greater than the marginal cost, the action will be followed. If the marginal cost is greater, it will not be. A company will produce more output until marginal benefit is equal to marginal cost. To maximize profits, the decisions of a company need to be made based upon this knowledge and some very complex calculus to find just want marginal costs and benefits of any given action are.
What are typical shapes of marginal-benefit curves?
Marginal Benefit curve is usually downward sloping, while Marginal Cost is usually upward sloping.
Marginal cost when buying a house?
marginal cost influences the buyer of the house. If the marginal benefit surpasses or even equal with the marginal cost, the buyer normally decides to buy the house.
When is economic surplus maximized?
when the marginal benefit of consumption is equal to the marginal cost of production.
A person should consume more of something when its marginal?
benefit exceeds its marginal cost.
Deciding whether to do or use one additional unit of some resource?
When deciding whether to use one additional unit of a resource, consider the marginal benefit it will provide compared to the additional cost or effort required. If the marginal benefit is greater than the marginal cost, it may be worth utilizing the additional unit. However, if the marginal cost exceeds the benefit, it may be more efficient to forgo using the additional unit.
