Marginal cost-benefit analysis states that financial decisions should be made and actions taken only when added benefits exceed added costs.

Question

Quizplus · Accepted Answer

Marginal cost-benefit analysis is based on the principle that decisions should be made when the incremental benefits outweigh the incremental costs. This means calculating the extra costs and benefits of taking an action compared to not taking it, and deciding whether the difference is positive or negative. If the benefits exceed the costs, the action should be taken, and if the costs exceed the benefits, the action should be avoided.

Marginal Cost-Benefit Analysis States That Financial Decisions Should Be Made