Marginal Cost

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Lesson Parent: 
Marginal Analysis as an Instantaneous Rate of Change
Problem: 

Let's assume that the marginal cost of a product is $110 for 900 units. What does that mean?

Answer: 

The marginal cost means that the cost will increase by $110 when we increase our production from 900 units to 901 units.

SAMPLE SOLUTION

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Solution: 

The marginal cost is C′(n). It is extremely useful to think about the Leibniz notation version of marginal cost. The marginal cost is

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in Leibniz notation. This means the marginal cost is the change in cost divided by the change in the number of units. So at 900 units, the marginal cost means that the cost will increase by $\$110<Sign in to see all the formulas>900<Sign in to see all the formulas>901$ units.