What typically happens to benefits as the amount of an activity is increased?
A) Marginal benefit increases.
B) Marginal benefit decreases.
C) Marginal benefit remains constant.
D) The marginal benefit changes only if the marginal cost changes.
E) Total benefit remains constant.

Question

Quizplus · Accepted Answer

As the amount of an activity is increased, the marginal benefit typically decreases. This is because as we increase the amount of an activity, we reach a point of diminishing marginal returns where each additional unit of the activity provides less and less benefit. Therefore, the marginal benefit for each additional unit will decrease.

What Typically Happens to Benefits as the Amount of an Activity