Marginal Cost and Average Total Cost
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Marginal Cost and Average Total Cost

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    Karam A.
    PL
    Karam A.

    i would prefer to explain for you...Total cost is variable cost and fixed cost combined. TC=VC+FC Now divide total cost by quantity of output to get average total cost. ATC=TC/Q Average total cost can be very handy for firms to compare efficiency at different output or when adjusting different factors of production. Marginal cost is a concept that's a bit harder for people grasp. The "margin" is the end or the last. The marginal unit is the last unit. Think of marginal cost as the cost of the last unit, or what it costs to produce one more unit. It's hard to find exactly what the cost of the last unit is, but it's not hard to find the average cost of a group of a few more units. To find this, simply take the change in costs from a previous level divided by the change in quantity from the previous level. MC = Change in TC / Change in Q

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