If marginal benefit exceeds marginal cost, then increasing the level of activity by one unit _____(a)_____ _____(b)_____ benefit by more than it _____(c)_____ _____(d)_____ cost

Answer:

If marginal benefit exceeds marginal cost, then increasing the level of activity by one unit increases total benefit by more than it increases total cost.

Therefore, increasing the level of activity by one unit must increase net benefit. The manager should continue to increase the level of activity until marginal benefit and marginal cost are equal

Explanation

If marginal benefit is greater than marginal cost, then increasing production will always result in a higher net benefit since net benefit is total benefit minus total cost. Thus, this process should continue until marginal benefit is no longer greater than marginal cost which occurs when they are equal.