A rational decision maker takes an action only if the
A)marginal benefit is less than the marginal cost.
B)marginal benefit is greater than the marginal cost.
C)average benefit is greater than the average cost.
D)marginal benefit is greater than both the average cost and the marginal cost.

Question

Quizplus · Accepted Answer

A rational decision maker takes an action only if the marginal benefit is greater than the marginal cost. This is because the marginal benefit represents the additional benefit received from taking one more unit of the action, while the marginal cost represents the additional cost incurred from taking one more unit of the action. Therefore, it makes rational sense to take the action only if the additional benefit received outweighs the additional cost incurred.

A Rational Decision Maker Takes an Action Only If the