Question

In using marginal analysis, we:

Answer 1

Answer:

B. examine only the marginal costs, ignoring the sunk costs.

Explanation:

Marginal Analysis refers to the analysis of marginal (additional) cost & marginal (additional) revenue.

Eg : Producer Equilibrium is where Marginal Revenue = Marginal Cost.

Marginals vary only due to variable, & not fixed components.

Marginal Analysis examines only marginal costs, & not fixed or sunk costs.