Marginal value

A marginal value is (This third case is actually a special case of the second).

In the case of differentiability, at the limit, a marginal change is a mathematical differential, or the corresponding mathematical derivative.

These uses of the term “marginal” are especially common in economics, and result from conceptualizing constraints as borders or as margins.

[1] The sorts of marginal values most common to economic analysis are those associated with unit changes of resources and, in mainstream economics, those associated with infinitesimal changes.

Marginal values associated with units are considered because many decisions are made by unit, and marginalism explains unit price in terms of such marginal values.

Mainstream economics uses infinitesimal values in much of its analysis for reasons of mathematical tractability.

Assume a functional relationship If the value of

is discretely changed from

while other independent variables remain unchanged, then the marginal value of the change in

may refer to or to If an individual saw her income increase from $50000 to $55000 per annum, and part of her response was to increase yearly purchases of amontillado from two casks to three casks, then If infinitesimal values are considered, then a marginal value of

would typically refer to (For a linear functional relationship

However, in the case where the functional relationship is non-linear, say

Assume that, in some economy, aggregate consumption is well-approximated by where Then the marginal propensity to consume is