The opportunity cost of an activity is the foregone value of the alternatives. Fixed costs are the costs incurred before even the first unit can be produced. The fixed costs of building a new zero emission electric vehicle are the costs of building or hiring a production facility, of designing and testing the product, securing regulatory approvals, establishing a dealer network, etc. The marginal cost includes the material out of which one car is made, the labor necessary to assemble one car, the cost of transporting one additional car to the dealer, and the expense involved in selling and providing warranty service for one additional product. But the materials, labor etc.
Digital goods have zero marginal cost.
Once the bitstream has been created making each additional copy costs nothing, and they move almost frictionlessly through the network. Even if the apparent fixed cost of making a digital product is high, its competitive unit price asymptotically approaches zero as mass numbers of the product are sold. 4. executable software Computer programs. Please do not redistribute this mail without the author's permission.