When extending the concept of marginal or incremental analysis to the area of public sector management, the effect of changes in public output on social benefits and social costs are considered just as a private sector firm considers the incremental profit resulting from its revenue and cost decisions.

Question

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The statement is true. When using marginal or incremental analysis in public sector management, changes in public output are evaluated in terms of their impact on social benefits and social costs, just as a private sector firm would evaluate incremental profit resulting from revenue and cost decisions.

When Extending the Concept of Marginal or Incremental Analysis to the Area