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A marginal change is one that A

Economics Dec 15, 2020

A marginal change is one that

A. is not important for public policy.

B. incrementally alters an existing plan.

C. makes an outcome inefficient.

D. does not influence incentives.

Expert Solution

The answer to this question is option B, incrementally alters an existing plan.

In economics, the word "marginal" means "additional" or "incremental". Therefore, marginal change is the analysis of the additional item, unit, or subject. The concept of Marginal change can be used in the analysis of marginal costs and marginal benefits. In theory, the optimal decision is the point at which the marginal cost is equal to the marginal benefit. If any decision is made without reaching or beyond at the optimal point, the decision is not efficient and not optimal.

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