ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What Is Marginal Analysis? Marginal analysis is an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity. Companies use marginal analysis as a decision-making tool to help them maximize their potential profits.

Detailed explanation-2: -A cost-benefit analysis (also called a benefit-cost analysis) is a decision-making tool that helps you choose which actions are worth pursuing. It provides a quantitative view of an issue, so you can make decisions based on evidence rather than opinion or bias.

Detailed explanation-3: -Marginal decision-making means considering a little more or a little less than what we already have. We decide by using marginal analysis, which means comparing the costs and benefits of a little more or a little less.

Detailed explanation-4: -Marginal benefit is the maximum amount of money a consumer is willing to pay for an additional good or service. The consumer’s satisfaction tends to decrease as consumption increases. Marginal cost is the change in cost when an additional unit of a good or service is produced.

Detailed explanation-5: -Marginal analysis means that decision-makers compare the extra benefits with the extra costs of a specific choice. Certain inherently desirable products such as education and health care should be produced so long as resources are available.