Q.What are the formulae for estimating Marginal Cost and Marginal Product ?

MC = change in total cost divided by change in output (delta TC / delta Q); MP = change in total product divided by change in the variable input (delta TP / delta L). Both measure the effect of one additional unit.

Marginal Cost (MC). It is the addition made to total cost when one more unit of output is produced.

MC = (delta TC) / (delta Q)

When output rises by exactly one unit, MC = TC(n) - TC(n-1), where TC(n) is the total cost of n units.

Marginal Product (MP). It is the addition made to total product (output) when one more unit of a variable factor (e.g. labour) is employed, other factors held constant.

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