Which of the following statements is correct a Maximizing to

Which of the following statements is correct:

a) Maximizing total benefits is never equivalent to maximizing net benefits

b) Maximizing total benefits is equivalent to maximizing net benefits if and only if there are no costs associated with achieving more benefits

c) Profits cannot be maximized when marginal costs equal marginal benefits

d) Net marginal benefits can never be equal to marginal benefits.

Solution

Option b is correct.

Maximizing total benefits is equivalent to maximizing net benefits if and only if there are no costs associated with achieving more benefits.

Net benefits=Total benefits-Total costs

Net Marginal benefits=Marginal benefits-Marginal costs

Maximizing total benefits is equivalent to maximizing net benefits iff marginal costs=0