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Marginal cost is calculated for production and economies as it provides the information required for deriving the cost for producing additional items. One can calculate the marginal cost by dividing the total cost by difference in output between the 2 systems. When the production variables like the fixed costs FC and variable costs VC are same, one can get the total cost TC by using the formulae = VC+FC and you can get the average TC by dividing the value by total output(Q) or you can get a variable where the MC = Change in TC / Change in Q.
The average fixed cost is calculated from the fixed cost of production divided by the output quantity produced. The marginal unit is the last unit and the marginal cost is the cost of the last unit where marginal revenue is the additional income generated from the sale of one more unit of goods or services. The value can be calculated by comparing the total revenue generated from the number of sales and the total revenue generated from the sale of extra one unit.
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