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Healthcare Glossary

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Marginal cost

The net change in total cost that results from very small changes in specific variables, such as producing one additional unit of product.

An example of marginal cost would be:

Total cost of producing 10,000 units is £50,000. If a total of 10,001 units were then produced the total cost would be £50,002. This results in a marginal cost—the cost of producing the next unit—was £2.

See also:
Supply Chain

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