Question

Why would a producer conduct a marginal analysis?

A. To understand the type of taxes paid on a good or service
B. To determine whether a price increase will change what a consumer will buy
C. To predict the amount of environmental pollution caused by a manufacturer
D. To suggest a way to package a product so that it causes less pollution

Answer 1

Answer:

B.

Explanation:

Companies use marginal analysis as a decision-making tool to help them maximize their potential profits. Marginal refers to the focus on the cost or benefit of the next unit or individual, for example, the cost to produce one more widget or the profit earned by adding one more worker.