How Do I Calculate Marginal Cost?
Marginal cost is calculated by dividing the change in total cost by the change in quantity produced. To calculate the marginal cost, one needs to subtract the previous total cost from the new total cost and then divide by the change in the quantity produced. In mathematical terms, MC = Change in TC / Change in Q. Marginal cost is an essential metric for businesses as it helps them determine the optimal level of production and pricing strategies.