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Marginal Cost refers to the change in total cost due to production of one more or one less unit of output. Thus, if n units of goods are being produced we can calculate marginal cost as follows:

**MC = TC _{n} – TC_{(n – 1)}**

Thus, if n = 10 units MC = TC of 10 units minus TC of 10 – 1, i.e. 9 units.

When production changes not by single units of quantity (such as 9 units to 10 units) but by bulk of units such as shown in column 3 where output increases from 10 to 22 to 37 and so on till 80 units with successive increase in variable factor, the formula for calculating marginal cost is

**MC = ∆ TC / ∆ Q**

Where ∆ TC is the change in total cost and ∆Q is the change in total quantity of output.

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