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Within economics, margin is a concept used to describe the current level of consumption or production of a good or service. [1] Margin also encompasses various concepts within economics, denoted as marginal concepts, which are used to explain the specific change in the quantity of goods and services produced and consumed.
Thinking on the margin is one of the most fundamental concepts in economics–and a valuable everyday tool for making optimal decisions. For such an important idea, the meaning of marginal thinking is surprisingly simple: when faced with a decision, you should compare the marginal benefit of a possible action to its marginal cost.
Thinking on the margin or marginal thinking means considering how much you value an addition of something. You ignore the sunk costs of what’s already going to happen, and weigh up the costs and benefits of adding in something extra (extra work, money, bananas etc.).
Marginal: in economics, the term ‘marginal’ means the same as ‘by adding one more’ or ‘additional’. For example, marginal price is the price of buying one more, marginal labor output is how much an additional worker would produce, marginal propensity to save/spend refers to what percentage of a person’s additional income is saved ...
In economic theory we assume that economic decisions are taken in a marginal way, which means that decisions to consume (or produce) are made one at a time, taking into account all the relevant information available.
Jan 22, 2024 · Profit margin is a common measure of the degree to which a company or a particular business activity makes money. Expressed as a percentage, it represents the...
Aug 2, 2023 · Thinking at the margin, in economics, refers to the process of making decisions by considering the incremental or additional changes that result from a small, incremental change in a variable. This concept is fundamental to understanding how individuals, firms, and governments make choices and allocate resources.
