When the marginal benefit surpasses the marginal cost, rational economic decision-making suggests Jose would choose to produce another good, aiming to maximize overall benefit or profit. Here option A is correct.
When the marginal benefit exceeds the marginal cost, it suggests that the additional unit of production brings more value or satisfaction than the cost associated with producing it.
In economic terms, individuals and firms aim to maximize their overall well-being or profit by comparing marginal benefits and marginal costs. If the marginal benefit is greater, it indicates that the additional unit contributes positively to total utility or profit.
By choosing to produce another good, Jose is effectively increasing his overall benefit or profit. This decision aligns with the principle of rational decision-making in economics, where individuals seek to allocate resources in a way that maximizes their utility or profit. Here option A is correct.
Complete question:
Jose figured out that the marginal benefit is greater than the marginal cost of producing an extra good. What decision is Jose likely to make when considering the marginal benefit and marginal cost of producing an extra good?
A) Producing another good.
B) Not producing another good.
C) Maintaining the current level of production.
D) Increasing the price of the goods.