Final answer:
An optimal choice in marginal analysis is achieved when marginal cost equals marginal benefit, and when benefits are maximized. It is important to balance the allocation of resources rather than solely focusing on minimizing total cost or maximizing total benefits.
Step-by-step explanation:
In marginal analysis, when comparing costs and benefits, an optimal choice is found when marginal cost equals marginal benefit and when benefits are maximized. This is because at the point where marginal cost is equal to marginal benefit, the last unit of good or service produced provides a level of benefit that is equivalent to the cost to produce it. Thus, no net loss or gain is experienced. Moreover, maximizing benefits while keeping costs in check ensures that the best possible outcome from the economic activity is achieved.
Marginal analysis is a cornerstone of economic decision-making and helps in understanding the balance of resource allocation. If marginal costs exceed marginal benefit, resources could be better used elsewhere, indicating that a situation is not optimal. Conversely, while minimizing total cost and maximizing benefits seem desirable, they do not necessarily provide the optimal point unless they result from a balance where marginal cost meets marginal benefit.