Marginal Cost Calculator
Calculate the cost of producing one additional unit of a product with detailed breakdown and analysis.
Input Data
Current Production
Additional Production
About Marginal Cost
What is Marginal Cost?
Marginal cost is the change in total cost that arises when the quantity produced is incremented by one unit.
Formula
MC = ΔTC / ΔQ
Where:
MC = Marginal Cost
ΔTC = Change in Total Cost
ΔQ = Change in Quantity
Application
Businesses use marginal cost to determine the optimal production level and pricing strategy.
Economic Significance
When marginal cost is below average cost, average cost decreases. When it’s above, average cost increases.
Tips for Accurate Calculation
- Include all variable costs (materials, labor, etc.)
- Exclude fixed costs that don’t change with production
- Use consistent units for all inputs
- Consider economies of scale in your analysis