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Explain marginal analysis, MB=MC. Use a fully labeled graph in the explanation.

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ranscribed image text: Problem - Marginal Benefit (MB) and Marginal Cost (MC); (50 points) Explain marginal analysis. Use a fully labeled graph in the explanation. (See Chap 1) Assume that we are producing some good like electricity. We need to determine the optimal amount of electricity to produce. 1) Draw a graph illustrating the marginal benefit (MB) and the marginal cost (MC) of producing electricity. What (and where on the graph) is the optimal level of electricity produce? What is the optimization condition? 2) Why is the marginal benefit curve declining as more and more electricity is produced? 3) Why is the marginal cost (MC) curve rising as more electricity is produced? 4) If MB>MC what should we do and why? 5) IfMB
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