marginal cost pricing

marginal cost pricing
The setting of product selling prices based on the charging of marginal costs only to the product. The approach is only likely to be used in exceptional circumstances, such as when competition is intensive, as its application to the complete range of products is likely to cause the business to make losses by its failure to cover its fixed costs.

Accounting dictionary. 2014.

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  • marginal-cost pricing — In economics, the practice of setting a product s price equal to the additional (marginal) cost of producing one more unit of output. The producer charges an amount equal to the cost of the additional economic resources. The policy is used to… …   Universalium

  • marginal cost pricing — The setting of product selling prices based on the charging of marginal costs only to the product. The approach is only likely to be used in exceptional circumstances, such as when competition is intensive, as its application to the complete… …   Big dictionary of business and management

  • marginal cost pricing — /ˌmɑ:dʒɪn(ə)l kɒst ˌpraɪsɪŋ/ noun a pricing method that involves fixing a price per unit that covers marginal costs and makes an acceptable contribution to fixed costs …   Marketing dictionary in english

  • marginal-cost transfer prices — Transfer prices set by marginal cost pricing When there is no market for the goods and services that are bought and sold between the divisions of an organization, the transfer price should be the marginal cost, which is normally assumed to be… …   Big dictionary of business and management

  • full cost pricing — A method of setting the selling prices of a product or service that ensures the price is based on all the costs likely to be incurred in its supply. Compare: cost plus pricing, marginal cost pricing …   Accounting dictionary

  • full cost pricing — An approach to setting selling prices that attempts to ensure that the price of a good or service is based on all the costs incurred in its supply, including overheads It usually involves an absorption approach to the costing of units. Compare… …   Big dictionary of business and management

  • Average cost pricing — is one of the ways government regulate a monopoly market. Monopolists tend to produce less than the optimal quantity pushing the prices up. Government may use average cost pricing as a tool to regulate prices monopolists may charge.Average cost… …   Wikipedia

  • Pricing strategies — for products or services include the following: Contents 1 Competition based pricing 2 Cost plus pricing 3 Creaming or skimming 4 Limit pricin …   Wikipedia

  • cost — costless, adj. costlessness, n. /kawst, kost/, n., v., cost or, for 11 13, costed, costing. n. 1. the price paid to acquire, produce, accomplish, or maintain anything: the high cost of a good meal. 2. an outlay or expenditure of money, time,… …   Universalium

  • marginal — marginality, n. marginally, adv. /mahr jeuh nl/, adj. 1. pertaining to a margin. 2. situated on the border or edge. 3. at the outer or lower limits; minimal for requirements; almost insufficient: marginal subsistence; marginal ability. 4. written …   Universalium

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