Marginal analysis
A) reveals the range of prices that should be profitable.
B) can be used to set prices, but it does not give you any idea what quantity might be sold at that price.
C) does not need an estimate of the demand curve.
D) usually suggests the same price as break-even analysis.
E) None of these alternatives is correct.

Question

Quizplus · Accepted Answer

Marginal analysis reveals the range of prices that should be profitable because it shows the additional revenue and cost associated with producing and selling one more unit of output. This information can be used to determine the price that will maximize profits.

Marginal Analysis