The underlying principle of the marginal or incremental approach is that changes in economic variables controlled by the corporation should be undertaken anytime such changes:
A) increase social benefits.
B) reduce social costs.
C) add more to the firm's revenues than to its cost.
D) add to the firm's revenues.
E) reduce the firm's costs.

Question

Quizplus · Accepted Answer

The marginal or incremental approach suggests that changes made by a corporation should add more to its revenues than to its costs. This approach allows companies to maximize profitability by focusing on changes that increase revenue while minimizing costs. Therefore, choice C, which states that changes should add more to the firm's revenues than to its costs, is the best choice.

The Underlying Principle of the Marginal or Incremental Approach Is