Marginal Benefit Calculator

Formula

The formula to calculate the Marginal Benefit (MB) is:

\[ MB = \frac{B1 - B0}{Q1 - Q0} \]

Where:

\(MB\) is the marginal benefit
\(B1\) is the final benefit
\(B0\) is the initial benefit
\(Q1\) is the final quantity
\(Q0\) is the initial quantity

What is Marginal Benefit?

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.

Example Calculation

Let's assume the following values:

Final Benefit (B1) = 500
Initial Benefit (B0) = 300
Final Quantity (Q1) = 50
Initial Quantity (Q0) = 30

Using the formula to calculate the Marginal Benefit (MB):

\[ MB = \frac{B1 - B0}{Q1 - Q0} = \frac{500 - 300}{50 - 30} = \frac{200}{20} = 10 \]

The Marginal Benefit (MB) is 10.