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In economics, the marginal cost is the change in the total cost that arises when the quantity produced is increased, i.e. the cost of producing additional quantity. In some contexts, it refers to an increment of one unit of output, and in others it refers to the rate of change of total cost as output is increased by an infinitesimal amount.
His most recent books include The Age of Resilience (2022), The Green New Deal (2019), The Zero Marginal Cost Society (2014), The Third Industrial Revolution (2011), The Empathic Civilization (2010), and The European Dream (2004).
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Changes in total costs and profit maximization. A firm maximizes profit by operating where marginal revenue equals marginal cost. This is stipulated under neoclassical theory, in which a firm maximizes profit in order to determine a level of output and inputs, which provides the price equals marginal cost condition.
Jan 28, 2024 · Skylar Clarine. What Is Marginal Cost? In economics, marginal cost is the change in total production cost that comes from making or producing one additional unit. To...
Jul 17, 2023 · Marginal cost (MC): the change in the total cost when the quantity produced changes by one unit. Cost curves: a graph of the costs of production as a function of total quantity produced. In a free market economy, firms use cost curves to find the optimal point of production (to minimize cost).
In economics, marginal cost is the change in the total cost that arises when the quantity produced is incremented by one unit; that is, it is the cost of producing one more unit of a good. [1] . Intuitively, marginal cost at each level of production includes the cost of any additional inputs required to produce the next unit.
Nov 25, 2022 · Article Summary. Co-authored by Alex Kwan and Jennifer Mueller, JD. Last Updated: November 25, 2022 Fact Checked. Your marginal cost is the cost you (or your business) will incur if you produce additional units of a product or service. [1] You may also hear marginal cost referred to as "cost of the last unit."
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