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Furthermore, benefits and costs can depend on a forager's community. For example, a forager living in a hive would most likely forage in a manner that would maximize efficiency for its colony rather than itself. [5] By identifying the currency, one can construct a hypothesis about which benefits and costs are important to the forager in question.
The Marginal Value Theorem is an optimality model that describes the strategy that maximizes gain per unit time in systems where resources, and thus rate of returns, decrease with time. [2] The model weighs benefits and costs and is used to predict giving up time and giving up density.
To construct an optimality model, the behavior must first be clearly defined. Then, descriptions of how the costs and benefits vary with the way the behavior is performed must be obtained. [1] Examples of benefits and costs include direct fitness measures like offspring produced, change in lifespan, time spent or gained, or energy spent and gained.
Marginal revenue is an important concept in vendor analysis. [6] [7] To derive the value of marginal revenue, it is required to examine the difference between the aggregate benefits a firm received from the quantity of a good and service produced last period and the current period with one extra unit increase in the rate of production. [8]
In a Lindahl equilibrium, the optimal quantity of the public good will be where the social marginal benefit intersects the marginal cost (point P). Each individual's Lindahl tax rate will be based on their own marginal benefit curve. In this model, individual B will pay the price level at R and individual A will pay at point J.
Marginal revenue equals zero when the total revenue curve has reached its maximum value. An example would be a scheduled airline flight. The marginal costs of flying one more passenger on the flight are negligible until all the seats are filled. The airline would maximize profit by filling all the seats.
The theory of reciprocal altruism, a form of altruism in which one organism provides a benefit to another in the expectation of future reciprocation. The Trivers–Willard hypothesis, which proposes that parents should invest more in the sex that gives them the greatest reproductive payoff (grandchildren) with increasing or marginal investment.
Rational choice theory can be viewed in different contexts. At an individual level, the theory suggests that the agent will decide on the action (or outcome) they most prefer. If the actions (or outcomes) are evaluated in terms of costs and benefits, the choice with the maximum net benefit will be chosen by the rational individual.