What is marginal benefit?

Marginal income refers to the increased income for every unit product sold, that is, the income obtained by selling the last unit product. It can be positive or negative. Marginal income is an important concept in enterprise analysis. A necessary condition for profit maximization is that marginal revenue equals marginal cost.

Under the condition of perfect competition, the output change of any manufacturer will not affect the price level, and the demand elasticity is infinite for a single manufacturer. Total income increases proportionally with the increase of sales volume, and marginal income is equal to average income and price. Under the condition of imperfect competition (monopoly competition), the sales volume of manufacturers is inversely proportional to the price.

Calculation formula of marginal income

The calculation formula of marginal income can be written as:

Marginal income = selling price-variable cost

Total marginal revenue equals total sales revenue minus total variable cost:

Total marginal revenue? =? Total variable cost of total sales revenue

Unit marginal revenue equals unit sales revenue minus unit cost:

Unit marginal income? = unit sales revenue? unit cost

Marginal rate of return is the profit rate after reflecting sales revenue, which can be calculated by the following two methods:

Marginal rate of return = total marginal revenue/total sales revenue = unit marginal revenue/unit sales revenue

Refer to the above? Baidu Encyclopedia-Marginal Benefits