GENERAL KNOWLEDGE

Detailed explanation-1: -Equi-marginal Principle States that an input must be allocated between various uses in such a way that the value added by the last unit of the input is the same in all its uses. This concept takes help from both the principles of incremental reasoning and opportunity cost.

Detailed explanation-2: -Discounting makes current costs and benefits worth more than those occurring in the future because there is an opportunity cost to spending money now and there is desire to enjoy benefits now rather than in the future.

Detailed explanation-3: -The marginal principle involves a comparison of benefit with cost, at the margin. That is, comparison of incremental revenue with incremental cost. Incremental cost denotes change in total cost, whereas incremental revenue means change in total revenue resulting from a unit increase in production.

Detailed explanation-4: -Marginal and Incremental Principle Marginal analysis implies judging the impact of a unit change in one variable on the other. Marginal generally refers to small changes. Marginal revenue is change in total revenue per unit change in output sold.