marginalprinsippet
The marginalprinsippet, or the marginal principle, is a rule used in economics to guide decision-making by focusing on the effects of small, incremental changes. It states that choices are optimized by comparing the additional benefits and additional costs of a marginal change.
According to the principle, an optimal decision is reached where the marginal benefit of the change equals
Applications of the marginalprinsippet are widespread. Consumers allocate a finite budget across goods by comparing the
Formally, the principle is expressed as MB = MC at the optimum in competitive environments. In production,
Limitations include reliance on measurable marginal costs and benefits, assumptions of rational behavior, and neglect of