What is marginal income?

In economics, marginal income concerns additional incomes that they obtain by producing one other unit of product. The marginal income is closely related to the limit costs, which represents the costs incurred by the creation of one more. The main economic theory teaches that the company creates the product until the marginal costs are equal to marginal income. This is the point at which the profits are maximized, and then, if another unit was produced, this should lead to a loss.

It is possible to mathematically express marginal income. In this case, it is equal to the change in the total income of the company, divided by a change in sale. A study of marginal income is part of a branch of the economy known as microeconomics that deals with the decisions of individuals and societies, which is influenced by economic incentives. This differs from macroeconomics that deals with general trends in economies like Whole.

assuming that the market at which the exiStaining healthy competition, company marginal income generally decreases with increasing production. This also applies to the market in general. In other words, a society that creates photocopies finds that there is a certain point in which due to the market price of the copier is not worth creating more. This does not mean that production is stopping, just that it does not increase. Similarly, copier manufacturers as groups find that too much increase in production will place too many copies to the market, reducing their price, at the expense of companies that make them.

conditions will change somewhat if one company has a monopoly on the copier market or what economists call "market power", which means the ability to set prices only. Specifically, the company's marginal income will be equal to the limit costs of a lower -seater than for a competitive company. This is reflected in the reduced quantity of the product on the market and therefore higher prices. In other words, for a monopolistic company, it is in their best financial interest to maintain a relatively small number of products on the marketU, at a price that is higher than it could get if it was involved in the competition. Due to this fact, it is easy to understand why many consumers hate the idea that a company has a monopoly on any market.