Question

Why do consumers and producers conduct marginal analyses?

Answer 1

Answer: The correct answer is : Marginal analysis is used as a decision-making tool so that people and companies can decide how to allocate resources to minimize costs and maximize benefits. The objective of the marginal analysis is to determine whether the costs associated with the change in activity will produce a benefit that compensates them.

Answer 2

Marginal analysis is to examine the added benefits versus the added cost of an activity. Consumers use marginal analysis unknowingly for their decisions everyday. While producers use marginal analysis as a tool for making a decision that will help them maximize their financial gain.