Marginal Analysis

Question 1

What is marginal analysis?

Answer 1

The analysis of the benefit or cost of ‘one more thing’

Question 2

What principle is based on marginal analysis and what must be true for an economically sustainable decision to be made in relation to marginal analysis?

Answer 2

The principle of decreasing marginal benefit. For a decision to be made economically, the marginal benefits must be greater than the marginal cost.