Marginal Cost Pricing

Presented by: Abhijeet Patil 15 Vipul Shoeb Momin 12

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Definition
Marginal Cost Pricing is a pricing method according to which firms set the prices of their products by taking into consideration the marginal cost of production, which is the cost of producing one extra unit of the product.

Example
If an airplane is going to fly from Mumbai to Delhi and the average cost of flying a passenger over that distance is Rs 4000. Then, Would the airlines allow a passenger to fly on

Example Contd
Its when there are few seats left and there is no one to buy @ Rs 4000 As long as MR > MC, the airlines would allow the passenger @ Rs 1500 The Marginal Cost could be : In this way airlines