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How do I calculate a marginal cost or marginal benefit, if numbers are given?
How do I calculate a marginal cost or marginal benefit, if numbers are given?
Expert Solution
If you are a consumer, marginal benefit can be calculated by looking at the change in marginal utility from one consumption level to another. Marginal cost is price paid for an additional unit of consumption. It both cases you find the numerical value of change given the set of numbers you are given.
If you are a firm, marginal benefit is the change in total revenue from producing one extra unit of output. The marginal cost is the change in total cost of producing another unit of output. Same as above, you find the numerical change in either total revenue or total cost from one level of output to another.
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