How to calculate MC in economics

Download Article Explore this Article parts 1 Formula Preparation 2 Solve Total Cost

How to calculate MC in economics

Download Article Explore this Article parts 1 Formula Preparation 2 Solve Total Cost 3 Marginal Cost Formula  Other Sections Questions & Answers Video Things You'll Need Related Articles References Article Summary      Author Info

Last Updated: June 3, 2021 References

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Marginal cost is a production and economics calculation that tells you the cost of producing additional items. You must know several production variables, such as fixed costs and variable costs in order to find it. You can learn how to find marginal cost by using a formula.

Steps

Part 1Part 1 of 3:Formula Preparation

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  • Quantities. You will want to devote the first column in your chart to the total number of units produced. Your quantities can increase by 1, such as 1,2,3,4 etc. or they can increase by larger increments, such as 1,000, 2,000, 3,000 etc.
  • Fixed costs and variable costs. During production there are certain costs, such as rent, that are fixed. Other costs, such as the cost of materials are variable according to the quantity.[1] X Research source  Make columns for each of the costs next to the quantities and input the figures.
Image titled Find Marginal Cost Step 2

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Part 2Part 2 of 3:Solve Total Cost

Image titled Find Marginal Cost Step 3

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Image titled Find Marginal Cost Step 4

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Image titled Find Marginal Cost Step 5

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  • If you are using a spreadsheet program, you can insert a formula in the total cost column that will add together the fixed and variable costs on each row to calculate total cost.Advertisement

Part 3Part 3 of 3:Marginal Cost Formula

Image titled Find Marginal Cost Step 6

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Image titled Find Marginal Cost Step 7

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Image titled Find Marginal Cost Step 8

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Image titled Find Marginal Cost Step 9

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Image titled Find Marginal Cost Step 10

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Image titled Find Marginal Cost Step 11

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Community Q&A Search Add New Question

  • Question Can marginal cost go up?

Community Answer Yes, marginal cost can increase as it exhibits economies of scale. Thanks! Yes No Not Helpful 4 Helpful 8

  • Question Why does the fixed cost increase and the variable cost remains the same? It should be the opposite.

Community Answer Total fixed costs should remain the same. The fixed cost per unit will vary according to how many units are produced. For example, if fixed costs were $4000, and 400 units were produced, fixed cost per unit is $10. If 100 units were produced, then fixed cost per unit is $40. Thanks! Yes No Not Helpful 7 Helpful 8

  • Question How do I find marginal total cost?

Community Answer Total cost B - Total cost A / the difference in output produced. This is used to determine the increase in total cost contributed by an increase in total output produced. Thanks! Yes No Not Helpful 1 Helpful 5

  • Question How can I calculate marginal revenue?

Community Answer Change in total cost (new-old)÷ change in output produced (new-old output). marginal cost is the addition to total cost resulting from increasing output by one unit. Thanks! Yes No Not Helpful 1 Helpful 0 Ask a Question 200 characters left Include your email address to get a message when this question is answered. Submit   Advertisement

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Things You'll Need

  • Calculator
  • Chart of production costs
  • Pencil/pen
  • Paper
  • Marginal cost formula
  • Spreadsheet program (optional)

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References

  1. http://economics.fundamentalfinance.com/micro_costs.php
  2. https://courses.lumenlearning.com/boundless-economics/chapter/production-cost/
  3. https://corporatefinanceinstitute.com/resources/knowledge/accounting/marginal-cost-formula/
  4. http://www.dummies.com/how-to/content/how-to-determine-marginal-cost-marginal-revenue-an.html
  5. http://economics.fundamentalfinance.com/micro_atc_mc.php
  6. https://www.khanacademy.org/science/microeconomics/firm-economic-profit/average-costs-tutorial/v/fixed--variable--and-marginal-cost

About This Article   wikiHow is a wiki, similar to Wikipedia, which means that many of our articles are co-written by multiple authors. To create this article, 11 people, some anonymous, worked to edit and improve it over time.  This article has been viewed 408,832 times.   31 votes - 77%   Co-authors:  11 Updated: June 3, 2021 Views:408,832 Categories: Economics Article SummaryX

To find marginal cost, first make a chart that shows your production costs and quantities. Create columns for units produced, fixed cost, variable cost, and total cost. Then, find the change in total cost. Do this by subtracting the cost for the lower quantity of units from the cost of the higher quantity of units. Next, find the change in total quantity by subtracting the higher quantity of units from the lower quantity. Finally, divide the change in total cost by the change in total quantity to calculate the marginal cost. For more help with setting up your chart, read on!Did this summary help you?YesNo

In other languagesItaliano:Calcolare il Costo Marginale Deutsch:Grenzkosten berechnen 中文:找出边际成本 Русский:вычислить предельные издержки Español:encontrar el costo marginal Français:calculer le cout marginal Bahasa Indonesia:Menghitung Besarnya Biaya Marjinal Nederlands:Marginale kosten vinden Tiếng Việt:Tìm chi phí biên

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