Page 4 - HA-COST

5. TC & MC

1) Marginal cost is the addition to total cost, when one more unit of output is produced.
MC is calculated as : MC n = TC n – TC n-1
2) When TC rises at a diminishing rate, MC declines.
3) When the rate of increase in TC stops diminishing, MC is at its minimum point.
4) When the rate of increase in total cost starts rising, the marginal cost is increasing.

6. TVC & MC