marginal analysis



The process of identifying the benefits and costs of different alternatives by examining the incremental effect on total revenue and total cost caused by a very small (just one unit) change in the output or input of each alternative. Marginal analysis supports decision-making based on marginal or incremental changes to resources instead of one based on totals or averages.

Use marginal analysis in a sentence

  • You may need to figure out the marginal analysis and use that to try and accurately predict how to proceed.

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  • When you are trying to decide which way to proceed on a project you need to break down the marginal analysis for all options.

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  • Before we could move forward, we had to check out our marginal analysis to see what effects it was having on us.

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