Question

At a quantity of two melons, the value of marginal benefit is _____, and marginal cost is _____.

Answer 1

At a quantity of two melons, the value of marginal benefit is
`\(MB_2\)`, and marginal cost is
`\(MC_2\)`.

Step-by-step explanation:

When considering the quantity of two melons, the marginal benefit
`(\(MB_2\))` refers to the additional satisfaction or value obtained from consuming the second melon. This can be calculated by finding the change in total benefit with respect to the change in quantity
`(\(MB_2 = (\Delta TB)/(\Delta Q)\))`. It represents the additional utility or pleasure derived from the second melon.

On the other hand, the marginal cost
`(\(MC_2\))` at a quantity of two melons represents the additional cost incurred in producing the second melon. It is calculated as the change in total cost divided by the change in quantity
`(\(MC_2 = (\Delta TC)/(\Delta Q)\))`. Marginal cost reflects the additional expense associated with increasing the quantity of output by one unit.

To make efficient decisions, individuals or firms typically aim to equate marginal benefit and marginal cost
`(\(MB_2 = MC_2\))`. When these two values are equal, it signifies an optimal level of production or consumption, ensuring that the last unit produced or consumed provides as much value as it costs. If
`\(MB_2\)` exceeds
`\(MC_2\)`, it suggests that producing or consuming the second melon adds more value than it costs, encouraging the decision to proceed. Conversely, if
`\(MC_2\)` is greater than
`\(MB_2\)`, it indicates that the cost outweighs the benefit, leading to a reconsideration of the decision.