Enter the initial and final benefit and the initial and final quantities into the calculator. The calculator will evaluate and display the marginal benefit.
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Marginal Benefit Formula
The following equation can be used to calculate the marginal benefit of a good or service.
MB = (B1 – B0) / (Q1 – Q0)
- Where MB is the marginal benefit
- B1 and B0 are the final and initial benefits respectively
- Q1 and Q2 are the final and initial quantities respectively
Marginal Benefit Definition
The marginal benefit of a good is the change in monetary benefit that an item generates with a change in quantity. Analyzing the marginal benefit is useful because the relationship between monetary benefit and total quantity sold isn’t always linear.
Marginal Benefit Example
How to calculate a marginal benefit?
- First, determine the initial and final benefits.
Measure the relative initial and final monetary benefits of the product.
- Next, determine the initial and final quantities.
Measure the initial and final quantities of the product.
- Finally, calculate the marginal benefit.
Use the equation above to calculate the marginal benefit.
A marginal benefit is a relationship between monetary benefits or revenue and the amount of product sold. The relationship is not always perfectly linear, so calculate a marginal benefit can help analyze the relationship further.