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BOOK SUMMARY :

What is marginal cost marginal cost is the cost of the next unit or one additional unit of volume or output to illustrate marginal cost lets assume that the total cost of producing 10000 units is 50000 if you produce a total of 10001 units the total cost is 50002marginal cost is the cost of one additional unit of output the concept is used to determine the optimum production quantity for a company where it costs the least amount to produce additional units if a company operates within this sweet spot it can maximize its profits the concepmarginal cost is the change in the total cost when the quantity produced is incremented by one that is it is the cost of producing one more unit of a good for example let us suppose variable cost per unit rs 25 fixed cost rs 100000 cost of 10000 units 25 10000 rs 250000 total what is a marginal cost home accounting dictionary what is a marginal cost definition marginal cost is the additional cost incurred for the production of an additional unit of output the formula is calculated by dividing the change in the total cost by the change in the product outputthe marginal cost formula represents the incremental costs incurred when producing additional units of a good or service the marginal cost formula change in costs change in quantity the variable costs included in the calculation are labor and materials plus increases in fixed costs administration overhead

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