A key aspect of marginal analysis involves: A) Comparing the potential long-term consequences of a decision. B) Comparing the average costs of a product or service with the total c... A key aspect of marginal analysis involves: A) Comparing the potential long-term consequences of a decision. B) Comparing the average costs of a product or service with the total costs. C) Evaluating costs and benefits that have already been incurred. D) Analyzing the additional (marginal) costs and benefits of a potential action.
Understand the Problem
The question is asking about a key aspect of marginal analysis, which focuses on evaluating the additional costs and benefits associated with a potential decision or action.
Answer
Analyzing the additional (marginal) costs and benefits of a potential action.
The final answer is D) Analyzing the additional (marginal) costs and benefits of a potential action.
Answer for screen readers
The final answer is D) Analyzing the additional (marginal) costs and benefits of a potential action.
More Information
Marginal analysis is a fundamental concept in economics where decision-making is centered around evaluating the additional benefits and costs associated with an incremental change. It aids in optimizing economic outcomes by focusing on the cost-benefit analysis of marginal changes rather than totals.
Tips
One common mistake is confusing marginal analysis with average cost analysis or making decisions based on sunk costs. It's crucial to only consider future costs and benefits.
Sources
- Marginal Analysis in Business and Microeconomics, With Examples - investopedia.com
- Marginal Analysis - Definition, Uses, and Limitations - corporatefinanceinstitute.com
AI-generated content may contain errors. Please verify critical information
