A rational decision maker takes an action if and only if the marginal benefit exceeds the marginal cost.

Question

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A rational decision maker evaluates the additional benefits of an action against its additional costs and proceeds with the action only if the benefits outweigh the costs. This principle is fundamental in economics and decision theory, emphasizing the importance of comparing incremental gains to incremental expenses to maximize utility or profit.

A Rational Decision Maker Takes an Action If and Only