When Deciding Whether to Buy a Second Car, Marginal Analysis

question 94

Multiple Choice

When deciding whether to buy a second car, marginal analysis indicates that the purchaser should compare the:

• A) benefits expected from two cars with the cost of both.
• B) additional benefits expected from a second car with the cost of the two cars.
• C) dollar cost of the two cars with the potential income that the cars will generate.
• D) additional benefits of the second car with the additional cost of the second car.

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Definitions:

Financial Outcomes

The results of financial decisions or activities, often reflected in financial statements, profitability, or liquidity measures.

Machine Breakdowns

Unexpected failures or stoppages of machinery, leading to delays in production or operations.

Marketing Effort

Activities and strategies undertaken by a company to promote its products or services and attract customers, such as advertising and promotions.

Strategy Map

A visual representation of an organization's strategies, showing the cause-effect relationship between strategic objectives.