marginalikustannus

Marginalikustannus, or marginal cost, is a fundamental concept in economics representing the change in total cost arising from the production of one additional unit of a good or service. It is calculated by dividing the change in total cost by the change in quantity. For example, if a company's total cost increases from $1000 to $1020 when production goes from 100 units to 101 units, the marginal cost of that 101st unit is $20. Marginal cost is a crucial factor for businesses when making production decisions. Understanding marginal cost helps firms determine the optimal level of output to maximize profits. When marginal cost is less than the price or marginal revenue, producing an additional unit is profitable. Conversely, if marginal cost exceeds marginal revenue, producing more would lead to a decrease in profits. Marginal cost typically exhibits a U-shaped curve, initially decreasing due to economies of scale and then increasing as production volumes rise and fixed costs begin to spread over fewer units or resource constraints emerge. This concept is distinct from average cost, which is total cost divided by total output. Firms use marginal cost analysis in conjunction with marginal revenue to find the profit-maximizing output level where marginal cost equals marginal revenue.