Marginal value (COST)

The marginal value is the extra cost of producing one extra unit of output. Similarly, marginal revenue is the extra revenue resulting from selling an extra unit of goods. From the economics of a firm, when marginal revenue equals marginal costs, the firm is in an equlibrium optimal condition in terms of maximizing profits. Depending on the application, the dual variables of a linear-programming problem can be interpreted as marginal values. The economic interpretation of the dual variables is complicated by alternate optimum solutions (corresponding to different bases) that may yield different values of the dual variables. Thus, there may be two or more marginal values for the same constraint. Such multiple values must be interpreted with care. Dual problem; Duality theory.