What is actually the meaning of margin?

Question

I've seen that word a lot while doing my accounting/finance/economics subjects. I don't really know the eXact meaning..i just try to figure it out myself. i thought i knew it but i might be wrong.

First, explain the basic word to me.. "margin"? define it for me.

Second, what does "marginal profit" and "marginal revenue" exactly tell us? what does it mean? marginal..? what does it shows?

Answer 1

according to some business dictionaries i referred marginal is

Definition 1 :

Very small.

Definition 2 :

Referring to the next additional smallest unit added to the current total. Incremental.

Answer 2

Margin as used in commerce. The difference between the cost and the selling price.

Marginal profit - If the item sells for $1.00, and costs $0.75 to make, the margin is $0.25 each.

You can then use that information to calculate different marginal profits for different levels of sales.  1000 units $250, 10000 units $2500, etc.

Answer 3

The margin in general statistical terms (i.e. margin of error) is the percentage of allowance between a success or failure.

In finance - the margin is the percentage difference between the selling price and the cost. Most do not use "Marginal" the correct term is "margin".

Hope this helps

Tropper

http://www.dontdiepoor.com