Marginal analysis states that financial decisions should be made and actions taken only when
A) added benefits are greater than zero.
B) added benefits exceed added costs.
C) benefits equal costs.
D) demand equals supply.

Question

Quizplus · Accepted Answer

Marginal analysis is focused on examining the added benefits and added costs of a decision or action. The only time it is recommended to make a financial decision or take an action is when the added benefits exceed the added costs. This ensures that the decision or action is financially beneficial and will result in a positive outcome. The other options (A, C, and D) do not take into account the added costs and therefore do not ensure a financially sound decision.

Marginal Analysis States That Financial Decisions Should Be Made and Actions