Given Incremental Cost 100, Incremental Effect 2, and WTP 50, what is the Net Monetary Benefit (NMB)?

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Multiple Choice

Given Incremental Cost 100, Incremental Effect 2, and WTP 50, what is the Net Monetary Benefit (NMB)?

Explanation:
Net Monetary Benefit is calculated as NMB = (Incremental Effect × Willingness-To-Pay) − Incremental Cost. Here, Incremental Effect is 2 and Willingness-To-Pay is 50, so 2 × 50 = 100. Subtract the Incremental Cost of 100: 100 − 100 = 0. So the NMB is 0, meaning the intervention is exactly at the threshold of cost-effectiveness for this WTP. If the product were higher, NMB would be positive (cost-effective); if lower, NMB would be negative.

Net Monetary Benefit is calculated as NMB = (Incremental Effect × Willingness-To-Pay) − Incremental Cost. Here, Incremental Effect is 2 and Willingness-To-Pay is 50, so 2 × 50 = 100. Subtract the Incremental Cost of 100: 100 − 100 = 0. So the NMB is 0, meaning the intervention is exactly at the threshold of cost-effectiveness for this WTP. If the product were higher, NMB would be positive (cost-effective); if lower, NMB would be negative.

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