A rational decision maker will take only those actions for which the expected marginal benefit:
A) is positive.
B) is at its maximum level.
C) is greater than or equal to the expected marginal cost.
D) is less than the expected marginal cost.
E) exactly equals the total cost.

Question

Quizplus · Accepted Answer

A rational decision maker will take an action only if the expected marginal benefit is greater than or equal to the expected marginal cost. This means that the benefit gained from the action needs to outweigh the cost of taking the action. Hence, the correct answer is C.

A Rational Decision Maker Will Take Only Those Actions for Which