Marginal profit

Marginal profit is the difference between the marginal revenue and marginal cost associated with a sale transaction. Thus, it is the incremental profit gained from generating one additional sale. Generally, a business should continue producing units as long as there is a marginal profit to be gained from each additional sale. As a business reaches the upper end of its available production capacity, it becomes more expensive to produce goods, since maintenance and overtime costs increase; this increase in costs typically minimizes the additional incremental sales volume that can be achieved.

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