Question

4 -89%| 6:48 PM × Answer 1 of 1 consumption of one subsequent unit of the product. For a consumer price per gallon is the marginal cost per gallon, so the optimal number of gallons each week will be the number of gallons consumed when the price $4 or marginal benefit is 4 allo 2 4 tlar.gguld he andunud tat,.? Wu? 4, İdillere

i have a question about the answer that U gave me, how 4 can be the marginal cost and marginal benefit at the time?? why 4 is the marginal benefit?

Answer 1

Marginal benefit = (Total benefit)n - (total benefit)n-1

So at output level 5 marginal benefit = Total benefit at output level 5 - total benefit at output level 4

= 30-26

=4

As the price level is 4 so consumer will choose that level of output where the price that he is paying that is his marginal cost is equal to the benefit he is getting at that level of output that is his marginal benefit.

At output level 5 = Marginal benefit = Price = 4

So he will consume upto output level 5.