• Day 8 Entrep Community

  What is the difference between marginal cost and average cost?

  Posted by accountingbyte on December 22, 2025 at 8:00 PM

  The cost of producing one more unit is called marginal cost and the total cost divided by the amount of units produced is the average cost. Average cost provides a general image of efficiency of production, but marginal cost dwells on the changes. A company can face low average cost but an increasing marginal cost which is an indication that additional production will soon be costly. The two can assist managers in planning the prices, budgets, and production strategies.

  Source: https://accountingbyte.com/marginal-cost/

  accountingbyte replied 1 month, 1 week ago 1 Member · 0 Replies
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