Marginal cost

From Issuepedia
Jump to navigation Jump to search


The marginal cost of a given product is the cost from producing "one more unit" of that product.

Economic theory bases many of its models on the assumption that the marginal cost is significant, and hence breaks down with regard to digitally copyable "products" (such as music, movies, written works, and other items often referred to as intellectual property or "content") whose marginal cost is so near to zero that the cost of tracking it (which, in turn, is far less than the cost of enforcing some means of being paid for each copy) begins to be more significant than the cost of making the copy.