The following table provides the costs (Cost A and Cost B)and the benenfits associated with each unit of activity
-From the second unit of activity,the marginal benefit exceeds the marginal cost by
A) $10.
B) $20.
C) $40.
D) $50.
E) $150.

Question

Quizplus · Accepted Answer

We can see from the table that the marginal benefit exceeds the marginal cost by $40 from the second unit of activity onwards. Therefore, it would be best to choose any unit of activity beyond the first one, as the marginal benefit exceeds the marginal cost by a significant amount. Choosing the first unit would result in a lower overall benefit-cost ratio.

The Following Table Provides the Costs (Cost a and Cost