Asked by Nicole Hoskins on May 20, 2024
Verified
The main difficulty in applying marginal analysis is
A) calculating total cost
B) determining which costs and revenues are relevant to a particular decision
C) calculating average cost
D) All of the above
Marginal Analysis
The examination of the additional benefits of an activity compared to the additional costs incurred by that same activity.
Total Cost
The sum of all expenses incurred in the production of goods or services, including both fixed and variable costs.
Relevant Costs
Costs directly related to a specific decision, which will change as a result of that decision.
- Evaluate decision-making scenarios using marginal analysis.
Verified Answer
KP
Kittiga PittayawonglarkMay 25, 2024
Final Answer :
B
Explanation :
Marginal analysis involves examining the additional costs and benefits of a specific decision. Therefore, it is essential to determine which costs and revenues are relevant to that decision. Calculating total cost and average cost are important, but they are not the main difficulty in applying marginal analysis.
Learning Objectives
- Evaluate decision-making scenarios using marginal analysis.