A person should consume more of something when its marginal: a

Economics Dec 15, 2020

A person should consume more of something when its marginal:

a. benefit exceeds its marginal cost

b. benefit is still better

c. cost equals its marginal benefit

Expert Solution

The correct answer to the given question is option a. benefit exceeds its marginal cost.

The marginal cost is the incremental cost incurred in producing an additional unit of a given good or service while the marginal revenue or benefit is the incremental revenue earned from selling every additional unit of the product. Hence, a person should consume more of something if his or her marginal revenue or benefit is more than the marginal cost.

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