Question

In using marginal analysis, we:

O A. examine only the sunk costs.
O B. examine only the marginal costs, ignoring the sunk costs.
O C. include sunk costs and opportunity costs.
O D. add up all the different possible opportunity costs.
O E. include all costs, even sunk costs.​

Answer 1

B. examine only the marginal costs, ignoring the sunk costs.

Step-by-step explanation:

Marginal Analysis refers to the analysis of marginal (additional) cost & marginal (additional) revenue.

Eg : Producer Equilibrium is where Marginal Revenue = Marginal Cost.

Marginals vary only due to variable, & not fixed components.

Marginal Analysis examines only marginal costs, & not fixed or sunk costs.