Answer:
Step-by-step explanation:
When deciding whether to buy a second car, marginal analysis indicates that the purchaser should compare the marginal cost of owning a second car with the marginal benefit of owning a second car.
Marginal cost is the additional cost incurred by purchasing a second car, such as the purchase price, insurance, maintenance, and fuel costs. The marginal cost of owning a second car increases as more cars are added, as the fixed costs, such as insurance and registration fees, are already incurred for the first car.
Marginal benefit, on the other hand, is the additional benefit obtained by owning a second car. This benefit could include convenience, flexibility, and increased mobility. However, the marginal benefit of owning a second car typically decreases as more cars are added, as the need for additional mobility decreases.
The purchaser should compare the marginal cost of owning a second car with the marginal benefit of owning a second car, and only purchase the second car if the marginal benefit exceeds the marginal cost. If the marginal cost exceeds the marginal benefit, the purchaser should not buy the second car.