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Marginal Cost as the Derivative of the Total Cost Function
When the quantity of output (Q) is treated as a continuous variable, the marginal cost (MC) is precisely defined as the first derivative of the total cost function, C(Q), with respect to quantity. The formula is: . This calculates the instantaneous rate of change in total cost for an infinitesimal increase in output. [2, 4, 8]
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.7 The firm and its customers - The Economy 2.0 Microeconomics @ CORE Econ
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Estimating Marginal Cost
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Marginal Cost as the Derivative of the Total Cost Function
A firm's total cost to produce a quantity (Q) of a good is given by the function C(Q) = 100 + 5Q + 2Q². What is the marginal cost of production when the firm is producing 10 units?
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A company's total cost to produce 200 units of a product is $5,000. When it increases production to 201 units, its total cost rises to $5,025. Based on this information, the marginal cost of producing the 201st unit is $____.
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A firm is currently producing at a level of output where the cost of producing one more unit is greater than the average total cost per unit. If this firm decides to increase its production by one unit, what will be the effect on its average total cost?
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Learn After
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