AP MicroeconomicsProduction & Costs
Marginal Cost
Marginal Cost is the additional cost incurred by producing one more unit of output.
It is calculated as the change in total cost divided by the change in quantity. Marginal cost typically decreases at first due to increasing marginal returns, then rises due to diminishing returns.
Formula / Example
MC = ΔTC / ΔQ
Interactive graph
Production Costs →
Drag the curves and see it for yourself.
Study module
Production and Costs →
Full lesson, practice questions, and flashcards.