{ "id": "marginal-cost", "version": "c773ce2430cf", "status": "published", "name": "Marginal Cost Calculator", "question": "What is the marginal cost?", "summary": "Computes marginal cost, the extra cost of each extra unit produced, from the total cost at two quantities or from fixed and variable costs, with average cost.", "category": "finance", "subcategory": "business", "url": "https://www.acalculator.org/finance/marginal-cost-calculator", "markdown": "https://www.acalculator.org/finance/marginal-cost-calculator.md", "kind": "function", "method": "Marginal cost = (TC₂ − TC₁) ÷ (Q₂ − Q₁), where TC is total cost at quantity Q; from parts, TC = fixed cost + variable cost. Average cost = TC₂ ÷ Q₂.", "assumptions": [ "Fixed cost is the same at both quantities, so it cancels out of marginal cost.", "Marginal cost over a change of several units is the average cost per extra unit across that change.", "Arithmetic is exact on the typed decimals; money shows to the cent, halves up." ], "inputs": { "$schema": "https://json-schema.org/draft/2020-12/schema", "type": "object", "properties": { "from": { "title": "I know the", "description": "Whether you know the total cost at each quantity, or a fixed cost and the variable cost at each.", "type": "string", "enum": [ "total", "parts" ] }, "fc": { "title": "Fixed cost", "description": "Costs that do not change with output, such as rent.", "type": "number", "x-unit": "USD", "minimum": 0, "maximum": 1000000000000 }, "q1": { "title": "Starting quantity", "description": "Units produced.", "type": "number", "minimum": 0, "maximum": 1000000000000 }, "c1": { "title": "Total cost at the start", "description": "Everything it costs to make the starting quantity.", "type": "number", "x-unit": "USD", "minimum": 0, "maximum": 1000000000000 }, "v1": { "title": "Variable cost at the start", "description": "Costs that rise with output, at the starting quantity.", "type": "number", "x-unit": "USD", "minimum": 0, "maximum": 1000000000000 }, "q2": { "title": "New quantity", "description": "Units produced.", "type": "number", "minimum": 0, "maximum": 1000000000000 }, "c2": { "title": "Total cost at the new quantity", "description": "Everything it costs to make the new quantity.", "type": "number", "x-unit": "USD", "minimum": 0, "maximum": 1000000000000 }, "v2": { "title": "Variable cost at the new quantity", "description": "Costs that rise with output, at the new quantity.", "type": "number", "x-unit": "USD", "minimum": 0, "maximum": 1000000000000 } } }, "outputs": { "mc": { "label": "Marginal cost", "description": "Change in total cost ÷ change in quantity: cost per extra unit.", "format": "money" }, "dCost": { "label": "Change in total cost", "description": "New total cost − starting total cost.", "format": "money" }, "dQuantity": { "label": "Change in quantity", "description": "New quantity − starting quantity.", "format": "number" }, "cost1": { "label": "Starting total cost", "description": "Total cost at the starting quantity.", "format": "money" }, "cost2": { "label": "New total cost", "description": "Total cost at the new quantity.", "format": "money" }, "average": { "label": "Average cost at the new quantity", "description": "New total cost ÷ new quantity.", "format": "money" } }, "defaultAnswer": { "inputs": { "from": "total", "fc": 160, "q1": 40, "c1": 320, "v1": 160, "q2": 60, "c2": 400, "v2": 240 }, "outputs": { "mc": 4, "dCost": 80, "dQuantity": 20, "cost1": 320, "cost2": 400, "average": 6.666666666666667 }, "text": "Going from $320.00 to $400.00 of total cost is a marginal cost of $4.00 per unit." }, "examples": [ { "given": { "from": "total", "q1": 40, "c1": 320, "q2": 60, "c2": 400 }, "expect": { "mc": 4, "average": 6.666666666666667 }, "source": "OpenStax, Principles of Economics 3e, 7.3 Costs in the Short Run, Table 7.10 (MC = ΔTC ÷ ΔQ; The Clip Joint: fixed cost $160, variable cost $160 at 40 haircuts and $240 at 60, total cost 320 to 400, so $4 each). https://openstax.org/books/principles-economics-3e/pages/7-3-costs-in-the-short-run: (400 − 320) ÷ (60 − 40) = 80 ÷ 20 = 4" }, { "given": { "from": "total", "q1": 4, "c1": 1250, "q2": 5, "c2": 1650 }, "expect": { "mc": 400, "average": 330 }, "source": "OpenStax, Principles of Economics 3e, 9.2 How a Profit-Maximizing Monopoly Chooses Output and Price, Table 9.3 (HealthPill total and marginal cost). https://openstax.org/books/principles-economics-3e/pages/9-2-how-a-profit-maximizing-monopoly-chooses-output-and-price: 1,650 − 1,250 = 400" }, { "given": { "from": "parts", "fc": 160, "q1": 40, "v1": 160, "q2": 60, "v2": 240 }, "expect": { "mc": 4, "cost1": 320, "cost2": 400 }, "source": "OpenStax, Principles of Economics 3e, 7.3 Costs in the Short Run, Table 7.10 (MC = ΔTC ÷ ΔQ; The Clip Joint: fixed cost $160, variable cost $160 at 40 haircuts and $240 at 60, total cost 320 to 400, so $4 each). https://openstax.org/books/principles-economics-3e/pages/7-3-costs-in-the-short-run: (160 + 240) − (160 + 160) = 80; 80 ÷ 20 = 4" }, { "given": { "from": "total", "q1": 1000, "c1": 25000, "q2": 1250, "c2": 29812.5 }, "expect": { "mc": 19.25 }, "source": "hand calculation in content.mdx: 4,812.50 ÷ 250 = 19.25" } ], "sources": [ "OpenStax, Principles of Economics 3e, 7.3 Costs in the Short Run: MC = ΔTC ÷ ΔQ, and Table 7.10 (The Clip Joint: fixed cost $160; variable cost $160 at 40 haircuts and $240 at 60; total cost $320 and $400). https://openstax.org/books/principles-economics-3e/pages/7-3-costs-in-the-short-run (retrieved 2026-10-05)", "OpenStax, Principles of Economics 3e, 9.2 How a Profit-Maximizing Monopoly Chooses Output and Price, Table 9.3: HealthPill total cost of $1,250 at 4 units and $1,650 at 5. https://openstax.org/books/principles-economics-3e/pages/9-2-how-a-profit-maximizing-monopoly-chooses-output-and-price (retrieved 2026-10-05)" ], "related": [ "marginal-revenue", "break-even", "profit", "revenue" ], "changelog": [] }