Question
Define the concept of Marginal cost. What is the relation between average cost and marginal cost? Use suitable diagrams.
Answer :
Word Count : 545
Marginal cost is the addition to total cost resulting from the production of one additional unit of output. In other words, it is the change in total cost due to a change in output by one unit. It is an important concept for understanding the cost of increasing production. The formula for marginal cost is: **MC = Change in Total Cost / Change in Quantity of Output** For example, if the total cost of producing 10 units is ₹1,000 and the total cost of producing 11 units is ₹1,080, the ________ _____ ______ ___ _____ ___ __________.
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Marginal cost is the addition to total cost resulting from the production of one additional unit of output. In other words, it is the change in total cost due to a change in output by one unit. It is an important concept for understanding the cost of increasing production. The formula for marginal cost is: **MC = Change in Total Cost / Change in Quantity of Output** For example, if the total cost of producing 10 units is ₹1,000 and the total cost of producing 11 units is ₹1,080, the ________ _____ ______ ___ _____ ___ __________.
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