Satisfaction from consumption is maximized when:
A) marginal cost equals zero.
B) marginal benefit equals zero.
C) marginal benefit equals marginal cost.
D) marginal benefit is maximum.

Question

Quizplus · Accepted Answer

The maximum satisfaction is achieved when the marginal benefit from consuming one more unit of a good equals the marginal cost of producing it. At this point, the consumer gets the most value for their money, and any further consumption will result in a decrease in satisfaction. Choice A is not correct because a marginal cost of zero does not necessarily mean that the consumer is getting the most value for their money. Choice B is not correct because a marginal benefit of zero indicates that the consumer is not receiving any satisfaction from the consumption, which is not the maximum. Choice D is incorrect because it does not take into account the cost of consuming the good.

Satisfaction from Consumption Is Maximized When