Answer
The Marginal Benefit of an extra cup of water is small, because water is in great supply.
a rational decision maker takes an action if and only if the marginal benefit of the action exceeds the marginal cost. it is known that water is an essential element for survival. but people are willing to pay much more for other unnecessary luxury items than for a glass of water. the reason is that a person's willingness to pay for a good is based on the marginal benefit that an extra unit of the good would yield.
the marginal benefit, in turn, depends on how many units a person already has.
Work Step by Step
Although water is essential for life, its MB is small because it is easily available. This is why water is sold very cheaply, compared to rare goods.
