For each of the following situations involving marginal cost (MC) and marginal benefit (MB), indicate whether it would be best to produce more, fewer, or the current number of units.

For each of the following situations involving marginal cost (MC) and marginal benefit (MB), indicate whether it would be best to produce more, fewer, or the current number of units.

     a. 3,000 units at which MC = $10 and MB = $13: More .

     b. 11 units at which MC = $4 and MB = $3: Fewer .

     c. 43,277 units at which MC = $99 and MB = $99: Current number .

     d. 82 units at which MC < MB: More .

     e. 5 units at which MB < MC: Fewer .
 

Explanation

a. More, because MB > MC, the benefit of consuming one more unit exceeds the opportunity costs (scarce resources used elsewhere) of producing that additional unit.

b. Fewer, because MC > MB, the opportunity costs (scarce resources used elsewhere) of producing one more unit exceed the benefit of consuming that additional unit.

c. Current number, because MB = MC, there is no net gain in using scarce resources in producing and consuming one more unit.

d. More, because MB > MC. (See the explanation for part a.)

e. Fewer, because MB < MC. (See the explanation for part b.)