Can someone please explain the concept of Marginal Benefit and Marginal Cost (Economic) in a simple way?
Marginal benefit is the added benefit of each additional unit consumed. Your first glass of water is going to have a higher benefit in quenching your thirst, and the added benefit of each additional glass will go down. Your 6th or 8th glass will have almost no thirst-quenching benefit at all. So you see that marginal benefit rises very quickly with the first few units consumed and then the added benefit of each additional unit consumed falls steadily. That’s about as simple as it can be explained. Marginal cost is the same process that occurs with each additional unit produced.
