What is the calculation formula of marginal cost?

Calculation formula of marginal cost: marginal cost rate = total cost variation/output variation.

Marginal cost at any level of output, the variable cost of increasing workers' wages, raw materials and fuel required for unit output.

The fundamental reason for the increase of marginal cost is the principle of diminishing marginal products. Marginal cost refers to the change of total cost caused by increasing or decreasing a unit output at a certain output level. Usually only variable costs. Marginal cost is used to judge whether it is economical to increase or decrease output.

Extended data:

When the income (unit output price) increased by increasing a unit output is higher than the marginal cost, it is cost-effective; On the contrary, it is not cost-effective. Therefore, any increase in the income of a unit output can not be lower than the marginal cost, otherwise there will be losses.

As long as the income of increasing an output can be higher than the marginal cost, even higher than the total average unit cost, it will increase profits or reduce losses.

Therefore, calculating marginal cost plays an important role in product decision-making. Microeconomics theory points out that when the output increases to the point where the marginal cost equals the marginal income, the output that can obtain the maximum profit for the enterprise can be obtained.