How to find marginal cost function calculus
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We can define Marginal Costs as the additional cost a business pays to produce an additional unit. She calculates the materials and other costs and finds out that it would cost her an additional $2 How do you calculate the marginal cost? Marginal cost can be calculated using the formula below
The marginal cost for this cost function is decreasing: MC= dC dY = 3 2 Y 1=4r 1=2w ; dMC dY = d2C dY2 = 3 8 r 1=2w Y5=4 <0 (14) A more general conclusion is true: if a production function has decreas-ing returns to scale, the cost function associated with it has increasing marginal cost. And vice versa, if a production function has increas-