A rational business's main goal is always to maximize profits. As complicated as business processes can be, the end goal always remains reaching the maximum profit. There are many ways a company has ...

Marginal revenue and marginal cost are essential calculations that help companies analyze and maximize their profits. Taken together, marginal revenue and marginal cost are used to determine how many ...

Marginal cost helps predict company profit by analyzing cost to produce extra units. Investors use the gap between marginal cost and revenue to assess profitability. Technology firms, due to low ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Timothy Li is a consultant, accountant, and ...

Marginal revenue measures extra income from producing one more unit. Compare marginal revenue and cost to decide on production adjustments. Track marginal revenue changes to set optimal production and ...

The concept of ‘pay for productivity’ is well documented in microeconomic theory. According to this concept, the labour market is in equilibrium when the marginal cost (extra cost) of employing an ...

Brian Beers is a digital editor, writer, Emmy-nominated producer, and content expert with 15+ years of experience writing about corporate finance & accounting, fundamental analysis, and investing.

Much economic theory is based not on marginal analysis of totals but on analyzing the changes caused by increasing or decreasing those totals. Marginal cost is the increase in total costs resulting ...

Your business's marginal revenue is the extra money made if you produce one more unit of a product or service. Knowing the marginal revenue from increasing sales can help you decide if expansion is ...