incremental cost

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Related to incremental cost: Sunk cost

Marginal Cost

The total cost to a company to produce one more unit of a product. The marginal cost varies according to how many more or fewer units a company wishes to produce. Increasing production may increase or decrease the marginal cost, because the marginal cost includes all costs such as labor, materials, and the cost of infrastructure. For example, if a widget manufacturer increases the number of widgets it produces, it may need to buy more material, but the costs of labor and factory maintenance remain the same, and are spread out over a greater number of widgets. This may reduce the marginal cost. On the other hand, if the manufacturer hires more workers and builds another factory, it will likely increase the marginal cost. It is also known as the incremental cost.

incremental cost

References in periodicals archive ?
Lall cites award-winning American economist William Baumol as providing this expansive definition of incremental costs.
The extensive use of incremental costs in the product has really helped to make it take off within the bank," he says.
It is only when the customer actually flies using the ticket acquired with the voucher that the airline incurs the incremental costs.
21)At a minimum, the disallowance provision should apply only to the incremental cost incurred for the lobbying activity, where the underlying activity is generally undertaken in the normal course of business.
Incremental costs include: (1) Incurred marketing expenses.
Costs of using Pegylated Interferon * Per Per Quality- Life-year Adjusted Life-Year Men Genotype 1 $91,000 $36,000 Other genotypes $37,000 $15,000 Women Genotype 1 $218,000 $55,000 Other genotypes $87,000 $24,000 * Incremental cost of using pegylated interferon plus ribavirin, compared with standard interferon plus ribavirin.
The proposed regulations reject the incremental cost and number-of-purposes methods.
Dieselpoint Search's speed, scalability and small footprint enabled HMV to handle a rapid increase in users efficiently and at extremely low incremental cost.
Voluntary delisting will also eliminate the incremental cost and administrative requirements inherent with dual listing on the PCX.
The lower limit should be no less than the incremental cost it adds to the total joint cost.
Data center automation is must-have technology for any customer deploying virtualization at scale; it provides the ability to manage virtual machines in the same manner as physical servers without adding incremental cost.
24 quality adjusted life years with an incremental cost effectiveness ratio of $88,700 per quality adjusted life year when compared to the MTWA risk stratification strategy.

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