My previous two posts dealt with different aspects of price discrimination, and since many future posts will cover the topic from various angles, I think it worthwhile to go over a few basic ideas and definitions. Marginal cost will be defined here as the cost to your arts organization of serving one more customer. It might be one more person through the turnstiles of your museum, one more person taking a seat for your performance or festival. For the examples just given, marginal cost might be very close to zero - it costs nothing at all to … [Read more...]