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Define marginal cost. With the help of an example, show how marginal cost can be obtained from the total cost. |
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Answer» Marginal cost (MC) is an addition made to the total cost (TC) when output is change by one unit i.e., MC = ΔTC/Q MC = TCn – TCn-1 For example: the marginal cost of 4th unit is the changed in the total cost when output is increased from three units to four units (i.e. 192 – 162 = 30), as shown in the table given below.
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