The process of identifying the benefits and costs of different alternatives. This is done by examining incremental effects on total revenue and total cost. These effects are caused by very small, single unit changes in each alternative’s output or input. Instead of using totals or averages, marginal analysis supports decision-making using incremental changes to resources.

More On This Topic

Link to This Definition
Did you find this definition of MARGINAL ANALYSIS helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary