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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 equation for marginal net benefits?
Marginal net benefits= Marginal benefit- Marginal cost
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 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.
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.
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.
A person should consume more of something when its marginal?
benefit exceeds its marginal cost.
When is economic surplus maximized?
when the marginal benefit of consumption is equal to the marginal cost of production.
How do you determine optimum production?
Three important cases: Total productive surplus is maximised at consumer equilibrium. Total profit is maximised when marginal cost = marginal benefit. Social welfare is maximised where marginal social cost = marginal social benefit.
