| 31. | However, it makes classic marginal cost pricing completely infeasible.
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| 32. | Each firm will produce where P = marginal costs and there will be zero profits.
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| 33. | For example, you see market segmentation in car pricing where marginal cost is not zero.
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| 34. | The important conclusion is that marginal cost " is not related to " fixed costs.
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| 35. | The downside is heavy production costs, which raise the marginal cost of every new subscription gained.
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| 36. | In a perfectly competitive market, supply and demand equate marginal cost and marginal utility at equilibrium.
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| 37. | Market price is determined jointly by the marginal cost of production * and * the demand.
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| 38. | It would be irrational to price below marginal cost, because the firm would make a loss.
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| 39. | Therefore, marginal cost is simply the wage rate w divided by the marginal product of labor
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| 40. | By some estimates, the marginal costs for clearing a smart-card transaction are well under a penny.
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