How do you know when one more is too much?

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Presentation transcript:

How do you know when one more is too much?

Marginal utility is the extra value or additional satisfaction a consumer obtains from consuming one additional unit of output.

Diminishing marginal utility is when the additional satisfaction or marginal utility associated with consuming additional units of the same product in a given amount of time eventually declines.

Marginal analysis is a decision-making tool for comparing the additional or marginal benefits of a course of action to the additional or marginal costs.

Glove Production Table Number of Workers (1) Number of Gloves Produced (2) (3) (4) (5)

Marginal product is the additional output produced by each successive unit of an input.

The law of diminishing returns states that as more units of a variable input are added to one or more fixed inputs, eventually the number of additional units of output produced will begin to fall.

Marginal cost is the increase in a producer’s total cost when it increases its output by one unit.