Why mc mb is optimal?

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1131021

2026-03-22 16:45

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The condition where marginal cost (MC) equals marginal benefit (MB) is optimal because it indicates that resources are being allocated efficiently. When MC equals MB, the additional cost of producing one more unit is exactly matched by the additional benefit derived from that unit, maximizing overall welfare. Any production beyond this point would result in a net loss, while producing less would mean forgoing potential benefits. Therefore, this equilibrium point ensures that resources are used in a way that maximizes total utility.

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