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marginal benefit
The additional satisfaction or utility that a person receives from consuming one additional unit of a good or service.
Noun
pl: marginal benefits
This term is primarily used in economics and decision theory to describe the incremental gain from a single additional unit of consumption or investment. It is the cornerstone of the law of diminishing marginal utility, where the perceived value of a good decreases as a person acquires more of it.
In a practical business or personal context, it is used to perform cost-benefit analyses. A rational actor will continue an activity only as long as the marginal benefit exceeds the marginal cost, making this a technical term for optimization and efficiency.
Meanings
Related Words
marginal costutilityeconomicsincrementprofitgainvalueoptimizationequilibriumproductionconsumptionresourceallocationefficiencyopportunity costincentivesurplusrevenuecosttrade offanalysisdecisionchoicemarginalismvariableoutputinputyieldreturnbenefitadvantageutility functiondemandsupplymarketpricequantityunitadditionincreasedecreaseslopederivativecalculuswelfaresatisfactionpreferencebudget constraintproductivitymarginal utilitymarginal productmarginal revenuemicroeconomicsmacroeconomicsrationalitymaximizationminimizationthresholdtradeoffpayoff