Answer:
Marginal Benefit = 7,6,5,4,3,2,1 .
Optimal Equilibrium = 4 units of consumption
Explanation:
Marginal Benefit is addition to total benefit when an additional unit is consumed.
Marginal Benefit = Total Benefit @ n - Total Benefit @ n-1
MB = 15-8 = 7
21- 15 = 6
26 - 21 = 5
30 - 26 = 4
33 - 30 = 3
35 - 33 = 2
36 - 35 = 1
Optimal Equilibium is where Marginal Benefit = Price . Such because : before that - MB > Price , increasing consumption is better for consumer. MB< Price , decreasing consumption is better for consumer.
In this case : Price i.e $4 = MB 4 at 4th gallon . So , this is optimal equilibrium.
