marginal cost

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marginal cost

An actuarial term referring to the additional cost required to produce an additional unit of benefit (e.g., unit of health outcome).
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In the short run, marginal cost pricing may not cover average costs in an industry with any market structure.
I knew I wanted marginal cost pricing, but that was regulatory.
If one observes marginal cost pricing in laboratory sessions, this must due directly to competition among sellers rather than buyers' market power.
However, the case study also highlights the complexities and challenges facing any agency considering such a move, and shows that not enough is known about the likely effects of moving to marginal cost pricing for water.
Using marginal cost pricing as the benchmark makes it more difficult for a plaintiff to establish that a nonlinear pricing plan is exclusionary, but this benchmark also reduces the likelihood of making errors in which an uncompetitive firm prevails in court when it could not prevail in the marketplace.
effectively compel marginal cost pricing, unless applied in so draconian a fashion as to prohibit all parallel increments in price.
So somewhat perversely, ETS actually creates an incentive for power companies to keep the top end of their capacity dedicated to fossil fuels as it will help maintain this windfall profit within the marginal cost pricing mechanism.
When the firm has more information about demand when choosing prices than it does when choosing capacity (typically referred to as tactical pricing), marginal cost pricing is optimal.
com have introduced marginal cost pricing to shift "distressed stock" such as unsold theatre tickets or holidays.
If the goal is greater efficiency, the literature suggests that marginal cost pricing yields the "best" user charges because it encourages the efficient use of public sector resources.
marginal cost pricing, average cost pricing, Ramsey pricing rule, rate of return regulation and price caps.
S] = H + [Delta] + (n - 1)T/n, where [Delta] represents a difference in welfare between the average cost pricing regulation and the marginal cost pricing regulation.