Question

What information does marginal analysis help a determine?

O Minimum production level necessary to pay debts
O Ratio of total cost to total revenue
O Allocation of resources to minimize taxes
O Price and quantity output levels to maximize profit

Answer 1

Marginal analysis helps businesses determine price and quantity output levels to maximize profit.

Step-by-step explanation:

Marginal analysis helps a business determine the price and quantity output levels to maximize profit.

By comparing the marginal cost of producing an additional unit with the marginal revenue gained from selling that unit, a business can determine whether producing more or less will increase its profits. Marginal cost helps businesses understand how changes in production affect their overall profits.