marginal cost

marginal cost definition - business

marginal cost

The additional cost needed to produce or purchase one more unit of a good or service. For example, if a firm can produce 150 units of a product at a total cost of $5,000, and 151 units for $5,100, the marginal cost of the 151st unit is $100. Industries with sharply declining marginal costs tend to be made up of firms that engage in price wars to gain market share. For example, the airlines often discount fares to fill empty seats with customers from competing airlines. Also called incremental cost.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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Hi:
I never studied economics before. I keep my budget and make sure that I bought within my means. Never felt compelled to want more or more. My well being (utility) is to live a simple life. In my opinion the more one have, the more one wants, there is less and less freedom. To own HOUSE IS A HUGE HASSLE. Looking at what is happening in the market today, with the banksters utilizing us all for their well being, just proves my point. Going back in the history of economic bubble Galbraith writes about the 1929 depression and mention other bubbles before that.
So for my well being (utility) the whole economic theory, model and etc, tells me in essence that the marginal cost of this so called theory is to high. To acquire more stuff, it decreases my well being. I prefer the simple life.

Posted by anonymous 67 days ago.

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