Introduction: Understanding marginal cost is crucial in economic analysis. It represents the additional cost incurred when producing one more unit of a good or service.
Formula: Marginal Cost (MC) = Variable Cost / Quantity
How to Use:
- Enter the variable cost in the first input field.
- Enter the quantity in the second input field.
- Click the “Calculate” button to get the marginal cost.
Example: Suppose the variable cost is $1000, and the quantity is 200 units.
- Marginal Cost (MC) = $1000 / 200 = $5 per unit.
FAQs:
- Q: Why is marginal cost important in economics? A: Marginal cost helps businesses determine optimal production levels and pricing strategies.
- Q: Can marginal cost be negative? A: In theory, yes, but it’s uncommon. Negative marginal cost implies lower costs with increased production.
Conclusion: Calculating marginal cost is a valuable tool for businesses to make informed decisions about production and pricing. Use our calculator for quick and accurate results.Copy code