--%>

Shapes of marginal-cost and the marginal-benefit curves

Indicate and describe the typical shapes of marginal-cost and the marginal-benefit curves. How are these curves employed to find out the optimal allocation of resources to a specific product? If current output is such that marginal cost exceeds marginal benefit, have to more or fewer resources be allocated to this product?  Describe.

E

Expert

Verified

The marginal benefit curve is downward sloping, MB falls as more of a product is consumed since additional units of a good yield less satisfaction than previous units. The marginal cost curve is upward sloping; MC rise as more of a product is generated since additional units needs the use of increasingly unsuitable resource. The optimal amount of a specific product takes place where MB equals MC. If MC exceeds MB, fewer resources must be allocated to this use. The resources are more valuable in some alternative employ (as reflected in the higher MC) than in this employ (as reflected in the lower MB).

   Related Questions in Finance Basics

  • Q : Describe Section 1.50 Section 1.50 : It

    Section 1.50: It is a section of the Budget Act which A) Identifies a certain style and format for the codes employed in the Budget Act, B) Authorizes the Department of Finance

  • Q : Assignments i want to write final

    i want to write final report about my state Texas. using the resources that i attached and the other resources to cover the outlines.

  • Q : How cash and capital budget relate to

    Describe how the cash budget and the capital budget associate to proforma financial statements.The cash budget illustrates the projected flow of cash in and out of the firm for particular time periods. The capital budget illustrates planned expe

  • Q : Define Expenditure Expenditure : The

    Expenditure: The expenditures reported on a department’s annual financial reports and “past year” budget documents comprises of amounts paid and accruals (comprising encumbrances and payables) for obligations made for the fiscal year

  • Q : Describe the effect of stock dividends

    Describe the effect of stock (not cash) dividends and stock splits onto the market price of common stock? Why do corporations state stock splits and stock dividends? Stock splits & stock dividends decrease the price per share of the common

  • Q : Assignments i want to write final state

    i want to write final state report. My state is Texas. You can use the resources that i attached, also you can use another resources to cover the outlines.

  • Q : Influence of working capital in the

    How and why does working capital influence the incremental cash flow estimation for a proposed large capital budgeting project? Describe. Several large projects need additional working capital. This investment in additional working capital bec

  • Q : Question on balance sheet of Yukon Bank

    Normal 0 false false

  • Q : Illustrates new balance sheet Normal 0

    Normal 0 false false

  • Q : What are Federal Funds Federal Funds :

    Federal Funds: For legal basis budgeting purposes, categorization of funds into which the money received in trust from an agency of the federal government will be deposited and finished by a state department in accordance with state and/or federal rul