Definition of «marginal dollar»

The term "marginal dollar" refers to an additional or incremental revenue earned from selling one more unit, attracting one extra customer, or generating an added penny in profit. It is often used in business and economics to describe the value of the last or final dollar that a company earns when it operates at full capacity or reaches its maximum potential. The concept suggests that each additional sale or revenue stream adds value to the overall financial performance of a company, but only up to a certain point where further increases in production or sales may not be worth the cost due to factors such as increased overhead expenses or diminishing returns.

Sentences with «marginal dollar»

  • Even if you're paying a lot of taxes now, you're talking marginal dollars when you look at current contribution, and average tax rate when making withdrawals. (money.stackexchange.com)
  • But let's assume that you are in the top 1 % of income earners and your last marginal dollar does fall into the highest of tax brackets. (thecollegeinvestor.com)
  • Based on the demographics of an economy, if marginal dollars tend to be saved versus spent, stimulus would affect the economy differently: (alephblog.com)
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