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Marginal Cost and Benefit Analysis
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What is the marginal benefit of producing one additional unit of a product if the total benefit increases from $100 to $150?

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Choose the Best Answer

A

$50

B

$100

C

$150

D

$200

Understanding the Answer

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Answer

The marginal benefit of producing one additional unit of a product is the extra benefit gained from that unit. In this case, the total benefit increases from $100 to $150 when one more unit is produced. To find the marginal benefit, you subtract the original total benefit from the new total benefit, which is $150 minus $100. This calculation shows that the marginal benefit of producing the additional unit is $50. So, by producing one more unit, you gain an extra $50 in benefit, which can help decide if the production is worth it.

Detailed Explanation

The marginal benefit is the extra benefit from making one more unit. Other options are incorrect because This answer might come from thinking about the total benefit instead of the extra benefit; This choice could confuse total benefit with marginal benefit.

Key Concepts

Marginal benefit
Topic

Marginal Cost and Benefit Analysis

Difficulty

easy level question

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