Marginal Cost Pricing Rule

The Marginal Cost Pricing Rule suggests that goods or services should be priced based on the additional cost of producing one more unit. This means the price reflects only the extra expenses involved in making that specific item, not the total cost of all resources used. The idea is to encourage efficient use of resources and fair competition, especially in markets with natural monopolies or public utilities. It helps ensure prices are aligned with actual production costs, promoting efficient consumption and investment decisions without overcharging or underpricing.