How to calculate Marginal Cost?
Dear student,
The computation can be explained with the help of this table
Marginal cost is the additional cost for procuring one extra unit of output.
As per the table, when units change from 10 to 12units then the Total cost changes from Rs 100 to Rs140
Here MC=Rs(140-100)/12-10=Rs40/2=Rs20
similarly when unit changes to 15 from 12 then MC=Rs(170-140)/15-12= Rs 30/3= Rs10.
When unit changes to 17 then MC=Rs(180-170)/17-15=Rs10/2= Rs5.
Regards
The computation can be explained with the help of this table
| Quantity | Total Cost(Rs) | Marginal cost(Rs) |
| 10 | 100 | - |
| 12 | 140 | 20 |
| 15 | 170 | 10 |
| 17 | 180 | 5 |
As per the table, when units change from 10 to 12units then the Total cost changes from Rs 100 to Rs140
Here MC=Rs(140-100)/12-10=Rs40/2=Rs20
similarly when unit changes to 15 from 12 then MC=Rs(170-140)/15-12= Rs 30/3= Rs10.
When unit changes to 17 then MC=Rs(180-170)/17-15=Rs10/2= Rs5.
Regards