Question

The marginal benefit of another T-shirt this month to Mary is $15. If the $10 price of a T-shirt reflects its marginal cost to Mary and Mary uses economic reasoning, she:_______.

a) will sell the T-shirts she has to others who are willing to pay $10.
b) will not buy a T-shirt this month.
c) cannot gain by buying another T-shirt.
d) will buy another T-shirt this month.

Answer 1

The correct answer is option d.

Step-by-step explanation:

The marginal benefit of another T-shirt is $15. The price of the T-shirt is $10.

The marginal cost is equal to the price, so it is also $10.

The marginal benefit earned from the T-shirt is greater than the marginal cost incurred on a T-shirt.

According to economic reasoning, it is profitable to buy another T-shirt. So, Mary will buy another T-shirt this month.