Which of the following does NOT occur when net benefit is maximized?
A) Marginal cost equals marginal benefit.
B) Total benefit exceeds total cost by the greatest amount.
C) The number that results when total cost is subtracted from total benefit is as large as possible.
D) The additional satisfaction from consuming one more unit of the activity exceeds the additional cost by the greatest amount.

Question

Quizplus · Accepted Answer

When net benefit is maximized, marginal cost equals marginal benefit (A), total benefit exceeds total cost by the greatest amount (B), and the number that results when total cost is subtracted from total benefit is as large as possible (C). However, at the point of maximization, the additional satisfaction from consuming one more unit (marginal benefit) equals the additional cost, not exceeds it by the greatest amount (D). This means D does not occur when net benefit is maximized, as it misrepresents the equality of marginal cost and marginal benefit at the point of maximization.

Which of the Following Does NOT Occur When Net Benefit