marginal cost

noun

Economics.

1. the cost of one additional unit of any item produced or bought in quantity.

marginal cost

1. The change in total cost of production when an output is varied by one unit.

Word History and Origins

Origin of marginal cost¹

First recorded in 1925–30

Example Sentences

Gavekal Research suggests the current AI investment climate resembles an “irrational bubble” due to high marginal costs and capital intensity.

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“We are clearly producing personalised, interactive knowledge at your fingertips at zero marginal cost,” he said.

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Publishers are reaping massive profits from this model, charging hundreds of dollars for each digital textbook while their marginal costs remain negligible.

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"Our country has the right to pay for electricity at the average cost of production and certainly not at the marginal cost of the latest gas-fired power plant in eastern Europe."

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Other members of the supply chain such as farmers and growers or bakers, class about 70% of their costs as overheads, leaving marginal costs of around 30%.

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