What is the boundary advantage?
The limit advantage is the advantage that the consumer receives from one additional unit of the commodity. Sometimes it is also described as marginal usefulness. The concept of marginal benefits can sometimes help explain economic patterns that seem contrainuitive.
The idea of marginal benefits is one of the key factors in the way consumers decide. Theoretically, these are one two main factors together with the cost of purchasing. This is because economists generally assume that customers make marginal decisions. This means that each purchase decision will make individually rather than, for example, decision -making at the beginning of the year, how many units of the product will buy during the year. If they have the same price, the customer will go for the price that offers the most important advantage. In fact, factors will have an effect at the same time, while other factors such as loyalty to a retailer or service quality may have an effect.
Economists also usually work from the theory of reducing marginal usefulness. This states that the more the consumer has the product, the less marginal benefit will gain from each additional unit. For example, a household without seats can gain great benefit from buying a chair and almost so much benefits from buying a second chair. The more seats he buys, the less likely he will have enough visitors to use another chair. It is even possible that at some point the marginal benefit will be negative, because another armchair would cause more problems by moving than it would benefit when sitting a guest.
The formula of decreasing marginal benefits is not consistent for all products. This can lead the priest initially confusing the economic situation. One case is the way the limit dose serves the effects of the deficiency. For example, although it is vital to life and diamonds are purely decorative, diamonds are much more expensive. This is because if you have enough water to meet your basic needB, another liter or liter less changes in use that you can get from the water. However, another diamond or one diamond will less affect the use that you can get from diamonds, whether it gives them as gifts or exchange for other goods or services.