Economics
Intermediate

Marginal Cost

The added cost of producing one more unit of output.

Formula

MC=ΔTCΔQMC = \dfrac{\Delta TC}{\Delta Q}

Variables

MCMarginal cost
\Delta TCChange in total cost
\Delta QChange in quantity

Example

TC rises $500 for 100 more units: MC = $5

Did You Know?

Profit is maximized where marginal cost equals marginal revenue — the single most important rule in microeconomics.

marginalcostmicro