if marginal benefit is less than marginal cost MB

if marginal benefit is less than marginal cost (MB<MC), then

a) society has wasted resources

b) society is not wasting resources but has not maximized the total net benefits

Solution

b) society is not wasting resources but has not maximized the total net benefits

because maximization occurs when two conditions are fulfilled:

a) Marginal cost = Marginal benefit

b) Moarginal cost is increasing at next unit.