MARGINAL COST OF PRODUCTION IS AN ECONOMICS TERM THAT REFERS TO THE CHANGE IN PRODUCTION COSTS RESULTING FROM PRODUCING ONE MORE UNIT. IT IS MOST OFTEN USED AMONG MANUFACTURERS AS A MEANS OF IDENTIFYING AN OPTIMUM PRODUCTION LEVEL
The formula for marginal costs of production is:
Marginal cost of production is best used to determine when a company can reach an economy of scale to optimize production and overall operations.
Difference Between Fixed and Variable Cost