![]() It equals the slope of the total cost curve/function or the total variable cost curve. Marginal cost is the change in total cost (or total variable cost) in response to a one unit change in output. Since equal amount of fixed costs is included in TCQ and TCQ – 1, if we subtract FC from both sides, we can define marginal cost as the difference between total variable cost at Q units minus total variable cost at Q – 1 units This can be written mathematically as follows: ![]() Marginal cost can be calculated directly by subtracting total cost of Q – 1 units from total cost of Q units. ![]() Firms compare marginal revenue of a unit sold with its marginal cost and produce it only if the marginal revenue is higher or equal to the marginal cost. It is because it directly affects a firm’s production decision. Of all the different categories of costs discussed by economists, including total cost, total variable cost, total fixed cost, etc., marginal cost is arguably the most important. The marginal cost curve is generally U-shaped. It equals the slope of the total cost function. ![]() In economics, marginal cost is the incremental cost of additional unit of a good. ![]()
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