In marginal analysis, which definition best describes marginal benefit?

• A. The benefit per unit on average, calculated as $\frac{totalbenefit}{quantity}$.
• B. The total benefit received from consuming or producing all units of a good or activity.
• C. The additional benefit gained from consuming or producing one more unit of a good or activity (the change in total benefit from a one-unit increase).
• D. The additional cost incurred from consuming or producing one more unit of a good or activity.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of marginal benefit in microeconomics. Marginal benefit refers to the additional benefit received from consuming or producing one more unit of a good or service.
2. Step 2: Differentiate marginal benefit from average benefit. Average benefit is calculated as total benefit divided by quantity, expressed as \(\frac{\text{total benefit}}{\text{quantity}}\), which gives the benefit per unit on average, not the incremental change.
3. Step 3: Recognize that total benefit is the sum of all benefits from consuming or producing all units, but marginal benefit focuses on the change when increasing quantity by one unit.
4. Step 4: Formally, marginal benefit can be expressed as the change in total benefit divided by the change in quantity, often written as \(\Delta \text{Total Benefit} / \Delta \text{Quantity}\), where \(\Delta\) denotes a change.
5. Step 5: Conclude that the best definition of marginal benefit is the additional benefit gained from consuming or producing one more unit of a good or activity, which captures the incremental change rather than an average or total amount.