MAKE IT A SIMPLE WORDS: Marginal analysis compares the additional benefits of an action with its extra costs. In this situation, the pharmaceutical company should increase output until the marginal cost (MC) of producing an additional unit equals the marginal revenue (MR) from selling that extra unit. This is the moment where profits are maximized. Given the company's significant fixed costs but relatively low variable costs per unit, the marginal cost of production is expected to be low. As long as the marginal revenue from selling one more unit of the drug exceeds the marginal cost of creating that unit, the company should continue increasing production