Which of the Following Is an Example of Marginal Analysis

question 73

Multiple Choice

Which of the following is an example of marginal analysis?

• A) To determine the optimal number of workers, a firm calculates the net benefits of hiring an extra worker.
• B) To determine the optimal amount of fertilizer to be used, a farmer calculates the total benefits of using a given amount of fertilizer.
• C) To choose the optimal apartment to rent, an individual estimates the net benefits of renting an apartment close to his place of work.
• D) To determine the optimal output that a firm should sell, the manager calculates the total revenue earned by selling different levels of output.

---

Definitions:

Bakery Franchise

A business system where individuals or entities purchase the rights to open and operate a bakery store under a larger company's brand and operational model.

Exclusive Territory Rights

The privilege granted to an entity allowing it to operate or sell within a specific geographic area without competition.

Overlapped Franchise Areas

Regions where the territories or markets of two or more franchise operations intersect or coincide, potentially leading to competition between them.

Termination of the Franchise Agreement

The legal ending of the contract between a franchisor and franchisee, which may occur for various reasons, including breach of contract or mutual agreement.