Marginal cost: What is Marginal Cost

What is Marginal Cost? The additional cost incurred to the total cost when one more unit of output is produced is known as Marginal Cost. Marginal Cost is also known as Incremental Cost. Marginal Cost can be used to determine the optimal production volume and pricing. Efficient, low- cost production is fundamental to business success. Maximizing production is often a key business goal, but sometimes increasing production can result in lower profits. Using marginal cost , businesses can optimize production volumes, set prices advantageously and deploy resources efficiently. This article explains how to calculate marginal cost and use it to help reduce costs and increase profits. What Is Marginal Cost ? Marginal cost is the additional cost incurred by a ... What is the definition of marginal cost ? MC indicates the rate at which the total cost of a product changes as the production increases by one unit. However, because fixed costs do not change based on the number of products produced, the marginal cost is influenced only by the variations in the variable costs . Learn what marginal cost is, how to calculate it using the marginal cost formula, and see real-world examples. Understand its role in business decisions.