what is meant
by marginal
opportunity cost
Answers
Explanation:
marginal cost refers to the cost to make one more unit, usually a product. It includes products a specific company makes, as a good or service among competing products from similar companies. A company in mid-sized position, will have a product line or portfolio in operation that earns them profit. If a firm cannot earn a profit among all sources of tradable - buy or sell - goods and services, they will eventually declare bankruptcy. A portfolio must decide how much of each product to produce and still earn a profit. A specific product could be increased at a marginal cost, rather than another product increased or an investment differing entirely. That includes marginal costs used instead to invest in new equipment or workforce training as examples. The opportunity to increase a product will not be taken, and rather the marginal cost paid for items expected to return more. That is invested in a good or service expected to return more than principal or marginal cost. There are many decisions how to spend discretionary money, as an increase in some products in a portfolio or invested to expect more returns. It deals with distribution of discretionary money into two assessed goods and services - products or equipment. A marginal cost to make more products will expect sales and marginal revenue, and a marginal opportunity for equipment will expect increased number of products at same or lower cost. Either decision contributes to a profit margin taken for the amount of money in the margin. The decision is usually taken at many products in a portfolio, or potential investments to increase production - requiring multiple spending scenarios.
Answer:
Marginal opportunity cost is an economic term that analyzes the effect of producing additional units of a product on the costs of a business, as well as the opportunities the companies give up to produce more of a product. It sounds complicated, but let's break it down to understandable terms.