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Keyword: marginal cost


A Matter of Costs (9/11/2007)

The rate at which variable cost changes in the short run is related to the nature of the fixed cost.

Keywords: AFC, ATC, AVC, average fixed cost, average total cost, average variable cost, capacity constraint, diminishing returns, efficiency maximization, increasing returns, marginal cost, MC, power generation, profit maximization

Advantage vs Behavior (7/7/2006)

Theory of advantage is not theory of behavior.

Keywords: advantage behavior, Boulding, consumer behavior, marginal benefit, marginal cost, marginal optimizer, marketing, optimization

Aerial Predators? (6/22/2001)

Are major airlines that temporarily lower their fares to squeeze out their low-fare niche-market startup competitors guilty of predatory pricing?

Keywords: aerial predators, American Airlines, antitrust, antitrust law, average variable cost, entrants, entry, fixed costs, leader, marginal cost, monopoly, network, predatory pricing, rivals

Bundling (transcript) (3/27/2007)

By selling goods in bundles with a lower bundle price than the sum of the prices sold separately, mixed bundling could increase total net revenue when demands are mostly negatively correlated and price discrimination is impossible.

Keywords: fake bundling, marginal cost, mixed bundling, negatively correlated demands, net revenue, positively correlated demands, pure bundling, separate pricing

Fund Raising at the Margin (9/22/2006)

The MR = MC profit maximization rule could be applied to fund raising.

Keywords: fixed cost, marginal cost, marginal revenue, MC, MR, profit

Marginal Cost and Average Total Cost (11/2/2011)

Marginal cost and average total cost can be derived from the short-run total cost subject to the law of diminishing returns.

Keywords: ATC, average total cost, law of diminishing returns, marginal cost, MC, TC, total cost

Marginal Cost and Average Total Cost (transcript) (1/29/2012)

Marginal cost and average total cost can be derived from the short-run total cost subject to the law of diminishing returns.

Keywords: ATC, average total cost, law of diminishing returns, marginal cost, MC, TC, total cost

Marginal Cost, Average Variable Cost and Average Fixed Cost (11/2/2011)

Marginal cost, average variable cost and average fixed cost can be derived from a short-run production function subject to the law of diminishing returns.

Keywords: AFC, AVC, average fixed cost, average variable cost, law of diminishing returns, marginal cost, MC

Marginal Cost, Average Variable Cost and Average Fixed Cost (transcript) (1/29/2012)

Marginal cost, average variable cost and average fixed cost can be derived from a short-run production function subject to the law of diminishing returns.

Keywords: AFC, AVC, average fixed cost, average variable cost, law of diminishing returns, marginal cost, MC

Maximization and Optimization at the Margin (7/7/2006)

Optimizing at the margin can bring about static economic efficiency.

Keywords: average benefit, entry, margin, marginal benefit, marginal cost, marginal revenue, Maximization, MB, MC, MR, optimization, pollution, profit, single pricing, tragedy of the commons

Metered Consumption (3/7/2007)

Resource conservation depends on who pays and the time horizon of costs vs benefits.

Keywords: energy conservation metering, energy efficiency, external cost, fixed cost, insulation, internal cost, landlord, life cycle cost, long-term benefit, marginal cost, private cost, property right, short-term cost, social cost, tenants, water

Pricing and economic surplus (7/7/2006)

Pricing affects how economic surplus is distributed between consumers and producers and thus the incentive and resources to come up with innovative products.

Keywords: commodity, consumer surplus, economic surplus, innovative products, marginal cost, marginal revenue, monopoly, perfect competition, price discrimination, reservation price, single pricing

Pricing to Cost - But Which Cost? (10/13/2007)

Pricing to marginal cost may not cover fixed cost.

Keywords: consumer surplus, economic surplus, fixed cost, marginal cost, perfect competition, perfect price discrimination, price searcher, price taker, profit, two-part pricing, variable cost

Profit Maximization - Total vs Marginal (11/17/2007)

Profit maximization can be characterized with reference to the total revenue and total cost curves or the marginal revenue and marginal cost curves

Keywords: fixed cost, marginal cost, marginal revenue, profit maximization, total cost, total revenue, variable cost

Profit Maximization Under Natural Monopoly (1/23/2012)

Natural monopoly with decreasing average total cost can still make profit by equating marginal revenue with marginal cost while achieving economic efficiency through price discrimination.

Keywords: ATC, average total cost, marginal cost, marginal revenue, MC, MR, natural monopoly, price discrimination, profit maximization, regulation, single pricing, total revenue, total willingness to pay, TWP

Profit Maximization Under Natural Monopoly (transcript) (1/29/2012)

Natural monopoly with decreasing average total cost can still make profit by equating marginal revenue with marginal cost while achieving economic efficiency through price discrimination.

Keywords: ATC, average total cost, marginal cost, marginal revenue, MC, MR, natural monopoly, price discrimination, profit maximization, regulation, single pricing, total revenue, total willingness to pay, TWP

Profit Maximization Under Single Pricing (transcript) (1/20/2012)

Single-price searchers maximize profit by setting a uniform price where marginal revenue is equal to marginal cost.

Keywords: diminishing returns, marginal cost, marginal revenue, MR = MC, price searcher, profit maximization, single pricing

Profit Maximization under Single Pricing (transcript) (1/29/2012)

Single-price searchers maximize profit by setting a uniform price where marginal revenue is equal to marginal cost.

Keywords: diminishing returns, marginal cost, marginal revenue, MR=MC, price searcher, profit maximization, single pricing

Profit maximization under single pricing (11/2/2011)

Single-price searchers maximize profit by setting a uniform price where marginal revenue is equal to marginal cost.

Keywords: diminishing returns, marginal cost, marginal revenue, MR=MC, price searcher, profit maximization, single pricing

The High-Tech Treadmill (6/22/2001)

The profit of New Economy business firms that have very high R&D fixed costs and very low marginal costs is brutally squeezed in economic downturn.

Keywords: average costs, business cycles, competitors, demand, fixed costs, hi-tech companies, investment, loss, marginal cost, new economy, obsolescence, profit, R&D, sales, software, upgrading, venture capital

The Snowball Effect (11/9/2001)

Knowledge-based industries subject to increasing returns because of high R&D fixed costs and low variable costs naturally tend to monopolize the market.

Keywords: Adam Smith, avalanche, diminishing returns, fixed cost, increasing returns, lock in effect, marginal cost, natural monopoly, negative feedback, network externality, operating system, positive feedback, R&D, snowball effect, software

Untangling Marginal vs Average Value (9/22/2006)

When average value is falling, marginal value is below it. And when average value is rising, marginal value is above it.

Keywords: average cost, average grade, marginal cost, marginal grade