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MARGINAL ANALYSIS : It is one of the main decision making tools using which companies are able to maximize their profits.

Definition : It is defined as the examination of the costs and benefits of a small change in the production of goods or an additional unit of an input or good.

Example :let's say that a manufacturing company is planning to increase production. Every pant they manufacture requires $0.50 of fabric. The pant company has $400 of fixed costs per month. If you make 200 pants per month, then each pant incurs $2.00 of those fixed costs. That means that the total cost per pant is $2.50. However, if the company decided to increase production to 400 pants per month, then the fixed cost that each pant incurs would drop to $1.00. The total cost of the pant, then, is $1.50, as the cost of materials remains the same. In this manner, doubling production will lowers marginal costs.

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Option e is the answer. Because the statement is false. Marginal rate of substitution ( MRS) is the rate at one commodity is willing to give to get additional unit of another commodity on same indifference curve which yield same level of satisfaction to consumer. MRS doesn't mean the substitution of goods for getting better indifference curve Option a, b,c,d, statements are true. Utility function expresses a consumer's level of utility in terms of amounts of good and services she or he consumes. Marginal utility of a good is the change in the utility resulting from a change in the amount of goods consumed . An indifference curve is a set of combination of two good that yield same utility. . Diminishing marginal utility states that as additional units of a good is consumed, the resulting increments in utility will diminish