Laura is a manager for HP. When Laura must decide whether to produce a few additional printers, she is choosing at the margin when she compares

Question

Quizplus · Accepted Answer

Laura is comparing the extra revenue from selling a few additional printers to the extra costs of producing the printers. This is the definition of marginal analysis and is the most relevant choice to consider when making a decision at the margin. Choice A compares HP's printers with those of competitors, which is not directly relevant to the decision. Choice B compares revenue with average cost, but marginal cost is more relevant when deciding whether to produce a few additional printers. Choice D looks at the total revenue and cost, which is not directly relevant when considering a small increase in production.

Laura Is a Manager for HP