What is meant by the term marginal revolution?

Answer 1

The term "marginal revolution" refers to a pivotal shift in economic thought that occurred in the late 19th century, primarily associated with the development of marginal utility theory. It marked a transition from classical economics, which focused on labor and production costs, to a focus on individual decision-making and the value derived from the consumption of goods. Key figures in this revolution include economists like William Stanley Jevons, Carl Menger, and Léon Walras, who emphasized how the value of goods is determined by their utility to consumers rather than solely by production costs. This shift laid the groundwork for modern microeconomic theory.