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Marginal cost

The marginal cost is the derivative of the cost, evaluated at the number you are already producing. A quadratic term gives a term with x in the derivative, and a linear term becomes a constant. The fixed term disappears. The number is money per extra unit, not the total cost. You use it when you compare with the price of one more unit.

Symbols

Example

$C(x) = 0.25x^2 + 12x + 300$. $C'(x) = 0.5x + 12$.

$C'(40) = 0.5 \cdot 40 + 12 = 32$ NOK.

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Part of Mathematics S2: Cost, revenue and profit.