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Economics 101: Marginal Cost | SterlingTerrell.net

Economics 101: Marginal Cost


What is marginal cost?

Marginal Cost is the change in Total Cost from producing one more unit of output.

Formally:

Marginal Cost = The Change in Total Cost / The Change in Quantity Produced

Marginal cost is important in business because one would never want to produce a good or service where marginal cost was greater than marginal revenue.