--%>

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 NAFTA Normal 0 false false

    Normal 0 false false

  • Q : In which ratios long-term bond investor

    Which ratios would a potential long-term bond investor is most interested in? Describe. Current & potential lenders of long-term funds, such like banks & bondholders, are interested in debt ratios.  While a business's debt ratios ri

  • Q : Gateways for biometric The different

    The different Gateways for biometric are as following: Transaction security: this is to secure customers transactions and so to protect their privacy both remotely and onsite.

  • Q : Influence of mergers and acquisitions

    What influence has mergers and acquisitions had on a customer's access to branches?A branch closing that has resulted from a merger require not necessarily mean a lost relationship. The cause a branch closes is usually the presence of a nearby b

  • Q : Define Programs Programs : The

    Programs: The activities of an association grouped on the basis of common objectives. The programs are included of elements that can be further classified into tasks and components.

  • Q : Durable goods industries and

    Normal 0 false false

  • Q : Define Limited-Term Position

    Limited-Term Position (LT): Any place that has been authorized only for a particular length of time with a set termination date.Limited-term positions might be authorized throughout the budget procedure or in transactions approved by the D

  • Q : Describe Form 9 Form 9 : It is the

    Form 9: It is the request by department for space planning services (example, new or extra space lease extensions, or renewals in non-institutional) and also evaluated by the Department of Finance.

  • Q : What is Statute Statute: It is a

    Statute: It is a written law enacted by the Legislature and signed by the Governor or a vetoed bill overridden by a 2/3 vote of both houses), generally referred to by its chapter number and the year in which it is passed. The statutes which modify a s

  • Q : Define Federal Fiscal Year Federal

    Federal Fiscal Year (FFY): The twelve month accounting period of the federal government, starting on October 1 and ending the following September 30. For illustration, a reference to FFY 2013 means the period starting October 1, 2012 and ending at Sep