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    Price, marginal & total revenue, and marginal & total cost

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    What Information do you need to perform a marginal analysis to identify the profit-maximizing output, and how do you go about estimating it?

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    Marginal analysis is simply the determination of optimal behavior by comparing benefits and costs that result from small (i.e., marginal) changes. Optimality requires that profit-maximizing output exists when the marginal benefit equals the marginal cost. Otherwise, a rise or fall could increase benefit more than cost. The marginal analysis has its mathematical ...

    Solution Summary

    Break down the process of marginal analysis is examined.