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.

Marginal cost at each level of production includes any additional costs required to produce the next unit.

If the good being produced is infinitely divisible, the size of a marginal cost will change with volume; so a non-linear and non-proportional cost function includes the following:

Variable terms dependent on volume,

constant terms independent on volume and occurring with the respective lot size,

jump fix cost increase or decrease dependent on steps of volume increase.

Variable terms dependent on volume,

constant terms independent on volume and occurring with the respective lot size,

jump fix cost increase or decrease dependent on steps of volume increase.

Marginal Cost Of Production

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References

Created by John Doe

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