Price, marginal & total revenue, and marginal & total cost
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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(Answer is included in brainmas.doc file attached below)
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.
$2.19