Marginal Cost

Definition

Marginal cost refers to the additional cost incurred from producing one more unit of output. It is calculated by dividing the change in total cost by the change in quantity produced.

Related terms

Per-Unit Costs: Per-unit costs refer to the average cost of producing each unit of output.

Average Variable Cost (AVC): AVC is calculated by dividing variable costs by quantity produced and represents variable costs per unit.

Average Total Cost (ATC): ATC is calculated by dividing total costs by quantity produced and represents total costs per unit.