Which of the following purchases is a matter of marginal, or incremental, cost-benefit analysis?
A large house
A college education
An alarm system
A surgical procedure
An additional sweatshirt

Answers

Answer 1

Answer:

An additional sweatshirt

Explanation:

Marginal or incremental cost - benefit analysis are costs associated with producing an additional unit of product as well as the benefits associated as a result of the additional unit. Marginal analysis is normally used when a company desires to expand (or increase) production so that they determine if the expansion would result with an increase in profit or not.

This is done by first determining the additional cost associated with the activity change and its benefits, then the costs and benefits are then compared.


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