Marginal Cost Formula

Given below marginal cost equation based on change in total cost and change in quantity of output. Marginal cost formula is defined as Change in total cost / Change in quantity of output. It refers to the change in the total cost a business will incur by producing one additional unit of an item. When marginal cost is plotted through graph, it results in "U" shaped curve at its minimum and for maximum, average cost increases as when quantity increases.

Marginal Cost Equation

Formula:

Marginal cost (M) = Change in total cost / Change in quantity of output

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Marginal growth is important in dealing with the economic theory, because a profit making firm will produce upto the point where marginal cost (MC) equals marginal revenue (MR). It is important to analyze the marginal growth of the company for its economic growth.


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