A firm should use marginal analysis when making a price-output decision.

Question

Quizplus · Accepted Answer

Marginal analysis involves comparing the additional costs and benefits of producing or selling one more unit. When making a price-output decision, a firm needs to consider the marginal cost and marginal revenue of each additional unit sold in order to determine the optimal price and quantity. Therefore, using marginal analysis is important in making a price-output decision.

A Firm Should Use Marginal Analysis When Making a Price-Output