Why is marginal product an important concept for business owners to understand?

see below

Explanation:

Marginal product is an analysis of the output that results from engaging an additional unit of input, such as labor. The concept of the marginal product compares the benefits derived from one more unit against the cost of producing it.

Business applies the concept of the marginal product to determine if the production of more units is profitable. The concept helps a company in deciding whether employing extra factors of production, such as labor, or land, is economically viable. For a business to profit from the production of an extra unit, the marginal product revenue from the unit must exceed or be equal to its marginal cost. Similarly, a business should hire workers only if the marginal product of labor is equal or exceed the cost of labor (the wage rate).

a recipe serves 8 people, and calls for 5 lbs of apples and 2 cups of flour. you want to prepare it for 24 people. divide 24 by 8 to get 3, and then multiply your ingredients by 3.

so for 24 people, you'll need 15 lbs of apples, and 6 cups of flour.