“ Marginal Cost … Pretty alien word ,if your an Engineer. I have this subject called Accounting and Finance which i’m studying in My 7th semester of Computer Science Engineering…. I came across this Topic called Marginal Cost. ”
Which is ,let me give you an example.
Production__________ cost
100 units ______|____ 500$
99 units _______|____500$-5$=495$ #here 5$ is your depreciation
Now suddenly your company starts producing one unit extra…. What Happens?
101 units______|____500$+5$=505$ #production cost goes up right
so here that 5$ is what you call the marginal cost.
Thus Production volume change is related to aggregated costs.
