Marginal Analysis

Filed Under » ,
Dictionary Says

Definition of 'Marginal Analysis'

An examination of the additional benefits of an activity compared to the additional costs of that activity. Companies use marginal analysis as a decision-making tool to help them maximize their profits. Individuals unconsciously use marginal analysis to make a host of everyday decisions.

Marginal analysis is also widely used in microeconomics when analyzing how a complex system is affected by marginal manipulation of its comprising variables.

Investopedia Says

Investopedia explains 'Marginal Analysis'

For example, if you already exercise five times a week and are thinking about adding a sixth day, you would use marginal analysis to determine whether the benefits of the sixth day, such as additional calories burned, endurance gained and muscle built, would be worth the costs of the sixth day, such as giving up sleeping in on Saturdays, having less energy to do your other weekend activities, and increasing your risk of injury.

Articles Of Interest

  1.

    Economic Indicators That Do-It-Yourself Investors Should Know

    Understanding these investing tools will put the market in your hands.

  2. The History Of Economic Thought

    Economics is a vital part of every day life. Discover the major players who shaped its development.

  3. The Austrian School Of Economics

    If you think economists are only concerned with numbers, check out this group, who are more like economic philosophers.

  4. A Practical Look At Microeconomics

    Learn how individual decision-making turns the gears of our economy.

  5. Explaining The World Through Macroeconomic Analysis

    From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone.

  6. Understanding Supply-Side Economics

    Does the amount of goods and services produced set the pace for economic growth? Here are the arguments.

  7. How Influential Economists Changed Our History

    Find out how these five groundbreaking thinkers laid our financial foundations.

  8. Arbitrage Squeezes Profit From Market Inefficiency

    This influential strategy capitalizes on the relationship between price and liquidity.

  9. Quants: The Rocket Scientists Of Wall Street

    Blend math, finance and computer skills to command a high - and well deserved - salary.

  10. Leading Economic Indicators Predict Market Trends

    Leading indicators help investors to predict and react to where the market is headed.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Zomma

    An options greek used to measure the change in gamma in relation to changes in the volatility of the underlying asset.

  2. Yield Elbow

    The point on the yield curve indicating the year in which the economy's highest interest rates occur. The yield elbow is the peak of the yield curve, signifying where the highest interest rates occurred.

  3. Xenocurrency

    A currency that trades in markets outside of its domestic borders.

  4. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.

  5. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.

  6. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=9122c7c77d98a67f13fb40c4caa3d339