Marginal analyses are pretty much at the heart of economics

The marginal analysis is an assessment conducted by companies to now which is the level of output and labor necessary to maximize profits. The marginal analysis helps decision-makers to know if producing one extra unit of a good or hiring one extra unit of labor will bring more benefits than costs or vice-versa. Therefore, this is an essential tool to know when a production or labor expansion is beneficial for the company. On the other hand, the average analysis only takes into consideration the current costs and benefits of production and labor. In other words, the usage of average analysis is limited by the possible additions of production and labor and their effect on profits. When using average analysis, a company cannot figure out if the maximization of profits will be achieved if the total output and labor are increased or decreased. Thus, the marginal analysis provides more tools for analysts to know the optimal level of inputs and outputs necessary to achieve organizational goals.