What does marginal analysis do?

Multiple choice question.

provides precise information about demand.

provides precise information about costs

provides a range of potential price levels

discerns the exact shape of the demand curve

1 answer

Marginal analysis primarily focuses on evaluating the additional benefits and costs associated with a decision. Among the given options, the best choice is:

provides a range of potential price levels.

This is because marginal analysis helps in understanding how changes in production levels can affect costs and revenues, which can influence pricing decisions. However, it's important to note that it doesn't provide precise information about demand or costs, nor does it typically discern the exact shape of the demand curve.