Marginal means "extra" and "add", which means "the last unit that has been added" or "the next unit that may be added" on the edge. It belongs to the concepts of derivative and differential, that is, when the independent variable changes slightly in the functional relationship, the marginal value is expressed as the ratio of two micro-increments due to the change of the variable.
This analysis method is widely used in the analysis of economic behavior and economic variables, such as utility, cost, output, income, profit, consumption, savings, investment, factor efficiency and so on.
Marginal analysis has become a very important method in economic research, which is determined by the research object of economics. Because the most effective use of economic research resources, and the best point is actually the extreme point of the function, according to the knowledge of advanced mathematics, it is easy to understand that the mathematical method of finding the extreme value is to find the derivative of the function, and when its first derivative is 0, find the extreme point.
Economics studies economic laws, that is, the relationship between economic variables. Economic variables are quantities that can take different values, such as inflation rate, unemployment rate, output, income and so on. Economic variables are divided into independent variables and dependent variables. Independent variable is the initial variable, and dependent variable is the variable caused by the change of independent variable. For example, to study the relationship between input production factors and output, we can take production factors as independent variables and output as dependent variables. The relationship between independent variables (production factors) and dependent variables (output) reflects some laws in production. Analyzing the relationship between independent variables and dependent variables is marginal analysis.
The word "marginal" can be understood as "increase", and "marginal quantity" also means "increment". More precisely, the independent variable increases by one unit, and the amount of dependent variable is the marginal amount. For example, the production factor (independent variable) increases by one unit, and the output (dependent variable) increases by two units. The two units of this dependent variable increase are marginal product. Or more specifically, the transportation company has added some cars, which can transport more than 200 passengers every day. These 200 passengers are marginal people. Marginal analysis is to analyze how much the dependent variable will change when the independent variable changes by one unit.
Economists put forward the concepts of "margin" and "marginal analysis" not for mystifying, but for making more correct decisions. Economists often say that this is why rational people should use marginal analysis.
We can use the fare of the last passenger as an example to illustrate the usefulness of marginal analysis. When considering whether to let this passenger get on the train at the 30 yuan fare, we should actually consider the concepts of marginal cost and marginal revenue. Marginal cost is the income (dependent variable) increased by adding a passenger (independent variable). In our example, if this passenger is added, there is no need to increase the old car, gasoline fee, employee salary and tolls. It is the same that a car pulls more people and fewer people. The increased cost is only food and drink for the passenger. Suppose the value of these things is 10 yuan, then the marginal cost is 10 yuan. Marginal income is the income (dependent variable) increased by an additional passenger (independent variable). In this case, if this passenger is added to increase 30 yuan's income, the marginal revenue will be 30 yuan.
When making decisions according to the marginal analysis method, it is necessary to compare the marginal cost and marginal income. If the marginal revenue is greater than the marginal cost, that is, increasing the revenue of this passenger is greater than the increased cost, then it is appropriate and a rational decision to let this passenger get on the bus. If the marginal revenue is less than the marginal cost, it is irrational to let passengers get on the bus. Theoretically, the number of passengers can be increased until the marginal revenue equals the marginal cost. In our example, it is rational for private companies to let passengers get on the bus. Whether the commander knows the concepts of marginal and marginal analysis, he actually makes decisions according to the principle that marginal benefits are greater than marginal costs. The conductor of a state-owned company refuses to let passengers get on the bus, or is restricted by strict rules (for example, the conductor has no right to reduce the price), or lacks the string of "deposit". We often say that the operating mechanism of state-owned enterprises is not as flexible as that of private enterprises, which is probably an example.
Marginal analysis is widely used in economics. Therefore, the concept of margin and the method of marginal analysis are considered as a revolution in economic methods. In economics, the marginal analysis method not only provides a useful tool for us to make decisions, but also enables economics to use mathematical tools. The relationship between independent variables and dependent variables represented by marginal analysis can be expressed by differentiation. Therefore, mathematical methods can be widely used in economics. Nowadays, mathematics is more and more widely used in economics, which plays an important role in promoting the development of economics itself and solving practical economic problems. Interested readers can realize this by reading some more advanced economic works.
In economics, margin refers to the output change caused by unit input. Marginal analysis method has many applications in management economics. This paper mainly analyzes the influence of each additional unit of products on the total profit of enterprises under a certain output level. It can be illustrated by the following formula.
Formula: marginal value =△f(x)/△X
Where x represents input and f(x) represents output, which is a function of x; Delta represents a variable.
Assuming that the cardinal number x is variable, the output increment caused by the unit will change with each additional unit of input.