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Marginal analysis is an important decision-making tool in the business world. Pricing decisions tend to heavily involve analysis regarding marginal contributions to revenues and costs. In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output, i.e. the marginal cost of producing the unit, is known as marginal-cost pricing. In the marginal analysis of pricing decisions, if marginal revenue, the increase in revenue from the sale of an additional unit of output, is greater than marginal cost at some level of output, marginal profit is positive, and, therefore, a greater quantity should be produced. Alternatively, if marginal revenue is less than the marginal cost, marginal profit is negative and a lesser quantity should be produced. Accordingly, firms tend to use this analysis to increase their production until marginal revenue equals marginal cost, and then charge a price which is determined by the demand curve. For instance, businesses often set prices close to marginal cost during periods of poor sales. If, for example, an item has a marginal cost of $1.00 and a normal selling price of $2.00, the firm selling the item might wish to lower the price to $1.10 - if demand has waned. The business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all.Which of the following is stated in the passage?a)The level of output produced is sometimes determined by taking in to account the difference between marginal revenue and marginal costb)Marginal analysis is the most important tool through which the pricing of a product is decided.c)The normal selling price of a product is usually close to the marginal cost of the product.d)Profit from an additional unit of output decreases with every increase in production.e)Marginal cost pricing is a technique used in the short run rather than in the long run.Correct answer is option 'A'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about Marginal analysis is an important decision-making tool in the business world. Pricing decisions tend to heavily involve analysis regarding marginal contributions to revenues and costs. In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output, i.e. the marginal cost of producing the unit, is known as marginal-cost pricing. In the marginal analysis of pricing decisions, if marginal revenue, the increase in revenue from the sale of an additional unit of output, is greater than marginal cost at some level of output, marginal profit is positive, and, therefore, a greater quantity should be produced. Alternatively, if marginal revenue is less than the marginal cost, marginal profit is negative and a lesser quantity should be produced. Accordingly, firms tend to use this analysis to increase their production until marginal revenue equals marginal cost, and then charge a price which is determined by the demand curve. For instance, businesses often set prices close to marginal cost during periods of poor sales. If, for example, an item has a marginal cost of $1.00 and a normal selling price of $2.00, the firm selling the item might wish to lower the price to $1.10 - if demand has waned. The business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all.Which of the following is stated in the passage?a)The level of output produced is sometimes determined by taking in to account the difference between marginal revenue and marginal costb)Marginal analysis is the most important tool through which the pricing of a product is decided.c)The normal selling price of a product is usually close to the marginal cost of the product.d)Profit from an additional unit of output decreases with every increase in production.e)Marginal cost pricing is a technique used in the short run rather than in the long run.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Marginal analysis is an important decision-making tool in the business world. Pricing decisions tend to heavily involve analysis regarding marginal contributions to revenues and costs. In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output, i.e. the marginal cost of producing the unit, is known as marginal-cost pricing. In the marginal analysis of pricing decisions, if marginal revenue, the increase in revenue from the sale of an additional unit of output, is greater than marginal cost at some level of output, marginal profit is positive, and, therefore, a greater quantity should be produced. Alternatively, if marginal revenue is less than the marginal cost, marginal profit is negative and a lesser quantity should be produced. Accordingly, firms tend to use this analysis to increase their production until marginal revenue equals marginal cost, and then charge a price which is determined by the demand curve. For instance, businesses often set prices close to marginal cost during periods of poor sales. If, for example, an item has a marginal cost of $1.00 and a normal selling price of $2.00, the firm selling the item might wish to lower the price to $1.10 - if demand has waned. The business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all.Which of the following is stated in the passage?a)The level of output produced is sometimes determined by taking in to account the difference between marginal revenue and marginal costb)Marginal analysis is the most important tool through which the pricing of a product is decided.c)The normal selling price of a product is usually close to the marginal cost of the product.d)Profit from an additional unit of output decreases with every increase in production.e)Marginal cost pricing is a technique used in the short run rather than in the long run.Correct answer is option 'A'. Can you explain this answer?.

Solutions for Marginal analysis is an important decision-making tool in the business world. Pricing decisions tend to heavily involve analysis regarding marginal contributions to revenues and costs. In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output, i.e. the marginal cost of producing the unit, is known as marginal-cost pricing. In the marginal analysis of pricing decisions, if marginal revenue, the increase in revenue from the sale of an additional unit of output, is greater than marginal cost at some level of output, marginal profit is positive, and, therefore, a greater quantity should be produced. Alternatively, if marginal revenue is less than the marginal cost, marginal profit is negative and a lesser quantity should be produced. Accordingly, firms tend to use this analysis to increase their production until marginal revenue equals marginal cost, and then charge a price which is determined by the demand curve. For instance, businesses often set prices close to marginal cost during periods of poor sales. If, for example, an item has a marginal cost of $1.00 and a normal selling price of $2.00, the firm selling the item might wish to lower the price to $1.10 - if demand has waned. The business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all.Which of the following is stated in the passage?a)The level of output produced is sometimes determined by taking in to account the difference between marginal revenue and marginal costb)Marginal analysis is the most important tool through which the pricing of a product is decided.c)The normal selling price of a product is usually close to the marginal cost of the product.d)Profit from an additional unit of output decreases with every increase in production.e)Marginal cost pricing is a technique used in the short run rather than in the long run.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for GMAT. Download more important topics, notes, lectures and mock test series for GMAT Exam by signing up for free.

Here you can find the meaning of Marginal analysis is an important decision-making tool in the business world. Pricing decisions tend to heavily involve analysis regarding marginal contributions to revenues and costs. In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output, i.e. the marginal cost of producing the unit, is known as marginal-cost pricing. In the marginal analysis of pricing decisions, if marginal revenue, the increase in revenue from the sale of an additional unit of output, is greater than marginal cost at some level of output, marginal profit is positive, and, therefore, a greater quantity should be produced. Alternatively, if marginal revenue is less than the marginal cost, marginal profit is negative and a lesser quantity should be produced. Accordingly, firms tend to use this analysis to increase their production until marginal revenue equals marginal cost, and then charge a price which is determined by the demand curve. For instance, businesses often set prices close to marginal cost during periods of poor sales. If, for example, an item has a marginal cost of $1.00 and a normal selling price of $2.00, the firm selling the item might wish to lower the price to $1.10 - if demand has waned. The business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all.Which of the following is stated in the passage?a)The level of output produced is sometimes determined by taking in to account the difference between marginal revenue and marginal costb)Marginal analysis is the most important tool through which the pricing of a product is decided.c)The normal selling price of a product is usually close to the marginal cost of the product.d)Profit from an additional unit of output decreases with every increase in production.e)Marginal cost pricing is a technique used in the short run rather than in the long run.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Marginal analysis is an important decision-making tool in the business world. Pricing decisions tend to heavily involve analysis regarding marginal contributions to revenues and costs. In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output, i.e. the marginal cost of producing the unit, is known as marginal-cost pricing. In the marginal analysis of pricing decisions, if marginal revenue, the increase in revenue from the sale of an additional unit of output, is greater than marginal cost at some level of output, marginal profit is positive, and, therefore, a greater quantity should be produced. Alternatively, if marginal revenue is less than the marginal cost, marginal profit is negative and a lesser quantity should be produced. Accordingly, firms tend to use this analysis to increase their production until marginal revenue equals marginal cost, and then charge a price which is determined by the demand curve. For instance, businesses often set prices close to marginal cost during periods of poor sales. If, for example, an item has a marginal cost of $1.00 and a normal selling price of $2.00, the firm selling the item might wish to lower the price to $1.10 - if demand has waned. The business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all.Which of the following is stated in the passage?a)The level of output produced is sometimes determined by taking in to account the difference between marginal revenue and marginal costb)Marginal analysis is the most important tool through which the pricing of a product is decided.c)The normal selling price of a product is usually close to the marginal cost of the product.d)Profit from an additional unit of output decreases with every increase in production.e)Marginal cost pricing is a technique used in the short run rather than in the long run.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Marginal analysis is an important decision-making tool in the business world. Pricing decisions tend to heavily involve analysis regarding marginal contributions to revenues and costs. In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output, i.e. the marginal cost of producing the unit, is known as marginal-cost pricing. In the marginal analysis of pricing decisions, if marginal revenue, the increase in revenue from the sale of an additional unit of output, is greater than marginal cost at some level of output, marginal profit is positive, and, therefore, a greater quantity should be produced. Alternatively, if marginal revenue is less than the marginal cost, marginal profit is negative and a lesser quantity should be produced. Accordingly, firms tend to use this analysis to increase their production until marginal revenue equals marginal cost, and then charge a price which is determined by the demand curve. For instance, businesses often set prices close to marginal cost during periods of poor sales. If, for example, an item has a marginal cost of $1.00 and a normal selling price of $2.00, the firm selling the item might wish to lower the price to $1.10 - if demand has waned. The business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all.Which of the following is stated in the passage?a)The level of output produced is sometimes determined by taking in to account the difference between marginal revenue and marginal costb)Marginal analysis is the most important tool through which the pricing of a product is decided.c)The normal selling price of a product is usually close to the marginal cost of the product.d)Profit from an additional unit of output decreases with every increase in production.e)Marginal cost pricing is a technique used in the short run rather than in the long run.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Marginal analysis is an important decision-making tool in the business world. Pricing decisions tend to heavily involve analysis regarding marginal contributions to revenues and costs. In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output, i.e. the marginal cost of producing the unit, is known as marginal-cost pricing. In the marginal analysis of pricing decisions, if marginal revenue, the increase in revenue from the sale of an additional unit of output, is greater than marginal cost at some level of output, marginal profit is positive, and, therefore, a greater quantity should be produced. Alternatively, if marginal revenue is less than the marginal cost, marginal profit is negative and a lesser quantity should be produced. Accordingly, firms tend to use this analysis to increase their production until marginal revenue equals marginal cost, and then charge a price which is determined by the demand curve. For instance, businesses often set prices close to marginal cost during periods of poor sales. If, for example, an item has a marginal cost of $1.00 and a normal selling price of $2.00, the firm selling the item might wish to lower the price to $1.10 - if demand has waned. The business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all.Which of the following is stated in the passage?a)The level of output produced is sometimes determined by taking in to account the difference between marginal revenue and marginal costb)Marginal analysis is the most important tool through which the pricing of a product is decided.c)The normal selling price of a product is usually close to the marginal cost of the product.d)Profit from an additional unit of output decreases with every increase in production.e)Marginal cost pricing is a technique used in the short run rather than in the long run.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Marginal analysis is an important decision-making tool in the business world. Pricing decisions tend to heavily involve analysis regarding marginal contributions to revenues and costs. In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output, i.e. the marginal cost of producing the unit, is known as marginal-cost pricing. In the marginal analysis of pricing decisions, if marginal revenue, the increase in revenue from the sale of an additional unit of output, is greater than marginal cost at some level of output, marginal profit is positive, and, therefore, a greater quantity should be produced. Alternatively, if marginal revenue is less than the marginal cost, marginal profit is negative and a lesser quantity should be produced. Accordingly, firms tend to use this analysis to increase their production until marginal revenue equals marginal cost, and then charge a price which is determined by the demand curve. For instance, businesses often set prices close to marginal cost during periods of poor sales. If, for example, an item has a marginal cost of $1.00 and a normal selling price of $2.00, the firm selling the item might wish to lower the price to $1.10 - if demand has waned. The business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all.Which of the following is stated in the passage?a)The level of output produced is sometimes determined by taking in to account the difference between marginal revenue and marginal costb)Marginal analysis is the most important tool through which the pricing of a product is decided.c)The normal selling price of a product is usually close to the marginal cost of the product.d)Profit from an additional unit of output decreases with every increase in production.e)Marginal cost pricing is a technique used in the short run rather than in the long run.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice GMAT tests.