Suppose your marginal cost of making a peanut butter and jelly sandwich is constant at $10, but the marginal benefit of eating the sandwich decreases from $12 for one sandwich, to $10 for two sandwiches, to $8 for three sandwiches, to $6 for four sandwiches. How many sandwiches would you eat?
Answer:
At most 3 sandwiches i would eat at this situation
Step-by-step explanation:
Making a first sandwich has a constant value 10$ but its marginal benefit is 12$. There is a 2$ benefit exist if i eat one.
Making the second one costs 20$ but its marginal benefit is 22$. Still 2$ benefit is exist if i eat the second one also.
Making the third one costs 30$ ant its marginal benefit also 30$. There is a even situation here. Making three sandwiches still an option.
After third one marginal benefit becomes lower than marginal cost of sandwiches.
