# "MC can be calculated both from total cost and total variable cost and is not affected by total fixed cost." Dissucs comment.

We know that MC is defined as the addition to the total cost of a firm, which is incurred while producing one more unit of output. Thus, MC can be derived from TC by deducting the value of previous unit from the current unit. That is, algebraically

MCn =TCnTCn – 1

Also, we know that TC refers to the total cost of production that is incurred by a firm in the short run to carry out the production of goods and services. It is the aggregate of expenditure incurred on fixed factors as well as variable factors. That is, it can be segmented in two parts namely- TFC and TVC.

Herein, TFC refer to those costs which are incurred by a firm in order to acquire the services of the fixed factors for production. And TVC refers to those costs which are incurred by a firm on the variable inputs for production.

In short run, the fixed factors cannot be varied and accordingly the fixed costs (TFC) remain same (constant) throughout all output levels. Whereas, the variable costs (TVC) are positive function of output i.e. as output increases, variable costs also increases and vice-versa.

In other words, while producing an additional unit of output, it is only the TVC that changes while TFC remains constant. This implies that while calculating MC, the fixed costs do not play a role as they remain constant throughout all the levels of output. Thus, we can say that it is only through TVC or TC that a firm can calculate its MC.

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