When Marginal Analysis Is Used to Determine the Optimal Quantity

question 121

Multiple Choice

When marginal analysis is used to determine the optimal quantity of accident avoidance, all of the following are true except which one?

• A)The total cost of the accident is minimized.
• B)The sum of the expected cost of an accident and the cost of avoiding accidents is minimized.
• C)The expected marginal benefit of accident avoidance equals the marginal cost.
• D)The expected marginal benefit of accident avoidance exceeds the marginal cost.

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