If a decision maker uses marginal analysis, then the relevant costs are the
A) full costs of a particular activity or product.
B) fixed costs which do not vary with the extra activity or output.
C) profits obtained on the activity or product.
D) average costs for a particular activity or product.
E) additional costs of a particular activity or product.

Question

Quizplus · Accepted Answer

Marginal analysis focuses on the additional or incremental costs and benefits of a decision, so the relevant costs are the additional costs associated with the activity or product.

If a Decision Maker Uses Marginal Analysis, Then the Relevant