To maximize net benefits in the table, it is most appropriate to use:
A) four units of the control variable, since the marginal benefit exceeds marginal cost.
B) six units of the control variable, since the marginal cost exceeds marginal benefit.
C) five units of the control variable, since net marginal benefits are zero.
D) None of the statements associated with this question are correct.

Question

To maximize net benefits in the table, it is most appropriate to use: 
A) four units of the control variable, since the marginal benefit exceeds marginal cost. 
B) six units of the control variable, since the marginal cost exceeds marginal benefit. 
C) five units of the control variable, since net marginal benefits are zero. 
D) None of the statements associated with this question are correct.

Quizplus · Accepted Answer

To maximize net benefits, we need to choose the quantity of the control variable where net marginal benefits are zero. From the table, we can see that at 5 units of the control variable, the marginal benefit is equal to the marginal cost, resulting in zero net marginal benefits. Therefore, five units is the optimal choice for maximizing net benefits.

To Maximize Net Benefits in the Table, It Is Most