Question

Which of the following is a correct application of Marginal Analysis? a. You buying 4 pairs of shoes for $240 because you are willing to buy the first pair for $60. b. You buying a fourth pair of shoes for $60 because you are willing to buy the first pair for $60. c. All of these are correct applications of Marginal Analysis. d. You deciding not to buy a fourth pair of shoes for $60 because you only value an additional pair at $50.

Answer 1

Answer:

Option d is the right one.

Explanation:

• Marginal research or analysis to optimize future gains as a decision-making method. In comparison to the expenses incurred by this same behavior, it calculates added benefits. The illustration described demonstrates that the marginal gain is smaller than that of the marginal cost.
• This involves purchasing goods until the marginal gain is equal to the marginal cost.

The other options aren't sufficient for the scenario provided. But that will be the best alternative for option d.