Which of the following best describes the rational rule for buyers in microeconomics?

• A. Buy a good only if its total benefit exceeds its total cost.
• B. Buy more of a good if the average benefit is greater than the average cost.
• C. Buy more of a good if the marginal benefit is greater than or equal to the price.
• D. Buy less of a good if the marginal cost is less than the marginal benefit.

Answer: (C)

Verified step by step guidance

1. Understand that the rational rule for buyers in microeconomics is based on comparing marginal benefit and marginal cost, not total or average values.
2. Recall that marginal benefit (MB) is the additional benefit received from consuming one more unit of a good, while marginal cost (MC) or price is the additional cost of that unit.
3. The decision rule states that a buyer should purchase additional units of a good as long as the marginal benefit of the next unit is greater than or equal to the marginal cost (price). This ensures maximizing net benefit.
4. Express this rule mathematically as: \(\text{Buy more if } MB \geq P\), where \(P\) is the price of the good.
5. Recognize that buying a good only if total benefit exceeds total cost is a broader condition, but the marginal rule guides incremental decisions, which is more precise for rational behavior.