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Unformatted text preview: and only if the marginal benefit of the action is at least as large as the marginal cost. $ Quantity MB MC Q 1 Q 2 12 4 9 2 Q 3 Individuals and firms can make better decisions by thinking at the margin. A rational decisionmaker takes an action if and only if the marginal benefit of the action is at least as large as the marginal cost. A Calculus Version of Thinking at the Margin DO NOT PANIC!! A Calculus Version of Thinking at the Margin (Q) = TB(Q) TC(Q) d(Q*) / dQ = dTB(Q*) / dQ dTC(Q*) / dQ = MB(Q*) MC(Q*) = 0 Therefore MB(Q*) = MC(Q*)...
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 Spring '08
 Bulmash
 Microeconomics, Revenue

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