The diagram shows a person’s marginal costs and marginal benefits of making trips to the cinema.
How many trips will the person make?
1 )
None, as each extra trip reduces marginal benefit.
2 )
One, as this maximises the excess of marginal benefit over marginal cost.
Two, as this maximises the net benefit of making trips.
4 )
Three, as all trips have a positive marginal benefit.
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