"marginal cost" refers to the additional cost of producing one additional item or unit. It helps businesses determine if producing more units will be profitable by comparing the cost of producing an extra item to the revenue it can generate.
Full definition
The author focuses on businesses that have been created as a function of
low marginal costs via the internet.
Pricing
at marginal cost in such industries can not produce sufficient revenues to cover costs.
You began to address the real issue when you mentioned zero cost fuel and the auctions based
on marginal costs.
That under certain conditions the relative prices of two goods do reflect relative marginal benefits and
relative marginal costs.
However, renewable technologies are often not the cheapest in terms of total cost,
not marginal cost.
But what happens when a technology comes along, a technology like the internet, which is so
powerful marginal cost is reduced to zero?
Through 3 - D printing and the «Internet of things»
many marginal costs could be cut such that prices and, subsequently, profits would gradually disappear.
-- The cumulative savings generated by these negative - cost options could offset the additional spending required for the options with
positive marginal cost.
But no one ever imagined that
marginal costs of producing and distributing goods and services could approach zero, making the products or services potentially free and therefore beyond the market.
This paper explores four approaches to organizing electricity transactions in a world with
low marginal costs.
It depends what the discussion is about though, whether it makes sense to ignore fixed costs, as the figures for
marginal costs do.
«An ACIL Tasman report comparing the current long - run
marginal costs for power generators revealed the difference between coal and wind energy.
If you haven't read Thomas Piketty's Capital in the Twenty - First Century, if you haven't read The Zero
Marginal Cost Society [Jeremy Rifkin's account of how extreme gains in productivity are disrupting capitalism by rendering many goods and services almost free], you can not even have a conversation with me about what the future is holding.
Ben Thompson at Stratechery explains: the Amazon playbook is to plow investment into R&D and fixed costs (building the store, the elaborate software to run it) and
reduce marginal costs (hourly wages for cashiers).
This is mathematically equivalent to the well - known result that one should increase pollution control as long as marginal benefits
exceed marginal costs.
Rud — I asked this previously — Have you seen any actual or
estimated marginal cost numbers on Southern's Clean Coal Project?
That changes the economics of the project and is scary as hell for traditional publishers, because then pricing is weird for them, involving only fixed costs and very little in
marginal costs per unit sold.
The agency is going to use this technology to authenticate data such
as marginal costs, fuel prices, average market prices, etc..
Electricity rates, which
reflect marginal costs for power plant operations and fuel prices, consistently decrease when wind enters the market.
There's A Problem I've written before about how small markets, both English language ones like Ireland and other territories with major markets in similar languages, face challenges when it comes to ebooks: So we have large publishers seeing sales internationally that they can EASILY service at
little marginal cost.
The plaintiffs had argued that the judiciary could recoup PACER fees only to the extent necessary to cover the
total marginal cost of operating the PACER system.
The trouble is, given the
increased marginal cost of mitigation, the economic headwinds, and beliefs by many that scientists don't have the climate thing right (per the great post of yesterday regarding Mooney's «Unscientific America») or that the Divine will simply «take care of good people» no matter, I don't see pursuit of mitigation as being something people or politicians are going to back either.
A recent report prepared by UC Davis researchers for the California Air Resources Board (ARB) found that compliance costs for the Low Carbon Fuels Standard (LCFS) may increase rapidly in the future if there are large differences in
marginal costs between traditional fossil fuels and alternative, low - carbon - intensity fuels; or if... Read more →
On September 14, 2017, academics, policy makers, representatives of Independent System Operators / Regional Transmission Organizations and other stakeholders engaged in a discussion of the future of electricity markets over the next two decades, with an emphasis on the potential for high penetrations of zero and low
marginal cost generation, and various options for organizing wholesale electricity transactions in the face of rapid technological change.
Carbon taxes simply impose the
same marginal cost on everyone, creating the same incentives for reductions.
This is 2025, so blockchain and Ethereum is a mature piece of technology that no longer suffers bubbles; at this time in history, the SoftCoin tokens apportions access rights to the SoftDAO software at a price
near marginal cost, which was 80 % below IncumbentCo's price.
The structure of renewable technologies, which have a high levelized cost of electricity but almost
zero marginal cost of production, gives renewable energy priority in the order of dispatch.
Over the long run we expect returns to be positive and reflect
rising marginal costs for these supply - constrained assets as demographics inexorably increase their demand.
Therefore, it makes sense to start at the high - end with customers who have a greater willingness - to - pay, and from there scale downwards, decreasing your price along with the decrease in your per - customer cost base (because of scale) as you go (and again, without accruing
material marginal costs).
After all,
while marginal costs may be zero, providing a superior experience in the age of the Internet entails significant upfront (fixed) costs, and while those fixed costs are minimized on a per - customer basis at scale, they can have a significant impact with a small customer base.
Analysts expected the iron ore to be supported by the high
Chinese marginal cost of production post c2012.
Scalable businesses have fewer
incremental marginal costs after a modest upfront investment has been made to create the product or service
Also, most B2B companies have excess business potential because they offer products or services that could field more customers at a
small marginal cost of goods sold.
«It's an easy sell to legislators and campus decision - makers, especially because the programs typically come at a
modest marginal cost, because most of the time the coursework is already in place,» Francis says.
Phrases with «marginal cost»