Question

Hello, I need some assistance on these questions.

1. What is marginal benefit?
2. If you would use marginal analysis to decide how many classes to take this semester, what would you calculate?
3. What is the profit maximizing principle?
4. What are sunk costs? Give an example

Answer 1

Answer ) Marginal benefit- it is maximum amount of money a consumer is willing to pay for additional goods and services. The consumer's satisfaction will decreaseas consumption increases.

Answer profit maximization principle -The Profit Maximization Rule states that if a firm chooses to maximize its profits, it must choose that level of output where Marginal Cost (MC) is equal to Marginal Revenue (MR) and the Marginal Cost curve is rising.

Answer ) Sunk cost- A sunk cost refers to a cost that has already occurred and has no potential for recovery in the future. For example, your rent, marketing campaign expenses or money spent on new equipment can be considered sunk costs.