In marginal analysis, what is the marginal benefit (MB) of an activity?

• A. The difference between average total cost and average variable cost.
• B. The additional cost incurred from consuming or producing one more unit of a good or activity.
• C. The additional benefit received from consuming or producing one more unit of a good or activity.
• D. The total benefit received from consuming all units of a good or activity.

Answer: (C)

Verified step by step guidance

1. Understand that marginal analysis focuses on the changes that occur when one additional unit of a good or activity is consumed or produced.
2. Recall that marginal benefit (MB) specifically measures the additional benefit or satisfaction gained from consuming or producing one more unit.
3. Differentiate marginal benefit from costs: MB is about benefits, while marginal cost (MC) relates to the additional cost of one more unit.
4. Recognize that average total cost and average variable cost are cost concepts and do not define marginal benefit.
5. Conclude that the marginal benefit is best described as the additional benefit received from consuming or producing one more unit of a good or activity.