marginal cost

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marginal cost

[′mär·jən·əl ′kȯst]
(industrial engineering)
The extra cost incurred for an extra unit of output.
References in periodicals archive ?
Given the setup in the last section, we see that it is quite unlikely that an insurer offering a package of basic coverage and a menu of ancillary coverages will follow marginal-cost pricing, even in a competitive market.
As in section III, since there is no a priori expected relationship between the two, this condition cannot be generally counted on to assure marginal-cost pricing.
For use below, a special notion of "consumer surplus" arising from such marginal-cost pricing is defined here,