Marginal analysis is useful in decisionmaking from "summary" of The Economic Naturalist by Robert H. Frank
Marginal analysis involves comparing the additional benefits and costs of a decision before making it. This analysis is crucial for decision-making because it helps individuals and businesses determine the most efficient course of action. By examining the marginal benefits and costs of each option, decision-makers can make informed choices that maximize their overall well-being or profit.
For example, imagine a company is considering whether to increase production of a certain product. By conducting a marginal analysis, the company can weigh the additional revenue generated by selling more units against the extra costs incurred in producing them. If the marginal benefit of producing an additional unit exceeds the marginal cost, it makes sense for the company to increase production. However, if the marginal cost outweighs the marginal benefit, it may be more prudent for the company to maintain its curr...
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