Overview
Marginal benefit is a fundamental concept in economics that helps individuals and businesses understand the additional satisfaction gained from consuming one more unit of a good or service. It plays a crucial role in decision-making, allowing consumers to evaluate whether the extra satisfaction is w...
Key Terms
Example: Eating a slice of pizza provides utility.
Example: Marginal cost is the cost of producing one more unit.
Example: The first slice of cake is delicious, but the fifth may not be as enjoyable.
Example: Deciding whether to buy a new car by weighing its costs against the benefits.
Example: Choosing between two brands of cereal based on price and taste.
Example: Satisfaction from a good meal.
Related Topics
Marginal Cost
The cost of producing one additional unit of a good or service.
beginnerSupply and Demand
The relationship between the availability of a product and the desire for that product.
beginnerConsumer Behavior
The study of how individuals make decisions to spend their resources.
intermediateElasticity
A measure of how much demand or supply changes in response to price changes.
intermediateKey Concepts
utilitydiminishing returnscost-benefit analysisconsumer choice