Question

In enginerring economic analysis, why are we interested in the incremental when performing Benefit-Cost Calculations for...

In enginerring economic analysis, why are we interested in the incremental when performing Benefit-Cost Calculations for Multiple Alternatives?

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Answer #1

We are interested in the incremental when performing Benefit-Cost Calculations for Multiple Alternatives because this helps us to understand the margin by which an alternative is more beneficial/costly than the other one. This helps us to make an informed choice and choose the alternative which will give the best benefits.

So, basically, we can see by making an incremental change, how will the cost and benefits change for different alternatives. We can compare them and rank them accordingly and choose the best alternative as per our requirement.

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