Given, MB = Marginal Benefit and MC = Marginal Cost

question 8

Multiple Choice

Given, MB = Marginal benefit and MC = Marginal cost. Then, for a positive decision variable in the optimal solution, which of the following relations holds?

• A) MB = MC = 0
• B) MB - MC > 0
• C) MB - MC = 0
• D) MB - MC < 0
• E) The relationship between MB and MC is indeterminate.

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Definitions:

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