Optimal decisions are made
A)in the marketplace.
B)if information about prices and marginal utilities is known.
C)when marginal utility is minimized.
D)at the margin.

Question

Quizplus · Accepted Answer

Optimal decisions are made at the margin, where the marginal benefit equals the marginal cost. This means that decision-makers will continue to make decisions until the last unit of benefit is equal to the last unit of cost. This decision-making process is also known as marginal analysis or marginal thinking. Therefore, option D is the correct answer. The other options are not necessarily true in all situations.

Optimal Decisions Are Made