Question

Explain the concept of marginal analysis.

Answer 1

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.

Answer 2

Step-by-step explanation:

Every activity, no matter how great or small, has primary objectives/costs/benefits. But there are also unintended benefits and so a marginal analysis would look to see what the additional costs and benefits of an activity would be.