What is the best definition of marginal benefit the possible?
A marginal benefit is a maximum amount a consumer is willing to pay for an additional good or service. It is also the additional satisfaction or utility that a consumer receives when the additional good or service is purchased.
Which of the following is the best definition of marginal cost?
Marginal cost refers to the increase or decrease in the cost of producing one more unit or serving one more customer. It is also known as incremental cost.
Which of the following is the best definition of 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.
How does marginal cost help in decision making?
Marginal costing is a very valuable decision-making technique. It helps management to set prices, compare alternative production methods, set production activity levels, close production lines and choose which of a range of potential products to manufacture.
What is the slope of marginal cost?
Since marginal cost equals the slope of the total cost curve (or the total variable cost curve), it equals the first derivative of the total cost (or variable cost) function.
What is marginal cost on a graph?
Now we get into the most interesting and important cost curve, the Marginal Cost Curve. It is the additional cost of producing one more unit and later on will allow us to maximize profits.
What is the marginal cost of producing the second unit?
The marginal cost of the second unit is the difference between the total cost of the second unit and total cost of the first unit. The marginal cost of the 5th unit is $5. It is the difference between the total cost of the 6th unit and the total cost of the, 5th unit and so forth.
How do you calculate marginal cost on a graph?
In order to calculate marginal cost, you have to take the change in total cost divided by the change in total output. Take the first 2 rows of your chart. Subtract the total cost of the first row by the total cost of the second row.