How Fast to Sail? The margin principle can increase the level of an activity as long as its marginal benefit exceeds the marginal cost. Thinking at the margin allows us to adjust our decisions. As speed of any ship increases more fuel is consumed just as it happens with car. That is mileage per liter falls, but more speed means ship can travel faster and thus can load and unload fast-meaning it travels a greater number of times than a slow- moving ship than it gains by travelling more (transporting a greater number of times). This gain should be compared with loss from fall in mileage. When the gain in weight is equal to loss in mileage equilibrium is reached as in case of any marginal analysis.
How Fast to Sail? The margin principle can increase the level of an activity as long as its marginal benefit exceeds the marginal cost. Thinking at the margin allows us to adjust our decisions. As speed of any ship increases more fuel is consumed just as it happens with car. That is mileage per liter falls, but more speed means ship can travel faster and thus can load and unload fast-meaning it travels a greater number of times than a slow- moving ship than it gains by travelling more (transporting a greater number of times). This gain should be compared with loss from fall in mileage. When the gain in weight is equal to loss in mileage equilibrium is reached as in case of any marginal analysis.
Chapter2: Economics: Eight Powerful Ideas
Section: Chapter Questions
Problem 19P
Related questions
Question
100%
Am in
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning