If an activity is worth pursuing at all,then it should be pursued up to the point where
A) total cost equals total benefit.
B) average cost equals average benefit.
C) marginal cost equals marginal benefit.
D) sunk costs equal zero.

Question

Quizplus · Accepted Answer

The optimal level of activity is where the marginal cost and marginal benefit are equal. This means that the additional cost of producing one more unit is balanced out by the additional benefit gained from selling one more unit. At this point, the net benefit is maximized. Options A and B are not necessarily the most efficient points, as they do not consider the incremental changes in cost and benefit, while option D refers to a sunk cost, which is not relevant to making future decisions about the activity.

If an Activity Is Worth Pursuing at All,then It Should