INTRODUCTION TO ENTREPRENEURSHIP
IMPORTANCE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT
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Question
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Marginal analysis is a cost/benefit decision process that seeks to determine
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The best qualities to look for in potential employees
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How a manager can cut costs
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The likely returns on a new investment
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Profit-maximizing quantity of output
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Explanation:
Detailed explanation-1: -The theory of marginal analysis states that whenever marginal benefit exceeds marginal cost, a manager should increase activity to reach the highest net benefit. Similarly, if marginal cost is higher than marginal benefit, activity should be decreased.
Detailed explanation-2: -To determine the quantity of any activity that will maximize its net benefit, we apply the marginal decision rule: If the marginal benefit of an additional unit of an activity exceeds the marginal cost, the quantity of the activity should be increased.
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