ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Marginal cost is the cost associated with producing one additional unit of a product or service. It is calculated by taking the total cost of producing a certain quantity and subtracting the cost of producing the previous quantity.

Detailed explanation-2: -Incremental cost is the total cost incurred due to an additional unit of product being produced. Incremental cost is calculated by analyzing the additional expenses involved in the production process, such as raw materials, for one additional unit of production.

Detailed explanation-3: -An Incremental Cost is a cost resulting from additional expenses associated with the production of an additional unit or product. Incremental Cost is also called marginal cost, it reflects changes that occur to the balance sheet of a company as a result of an addition to the unit of production.

Detailed explanation-4: -The marginal cost refers to the increase in production costs generated by the production of additional product units. It is also known as the marginal cost of production. Calculating the marginal cost allows companies to see how volume output influences cost and hence, ultimately, profits.

Detailed explanation-5: -When marginal product is rising, the marginal cost of producing another unit of output is declining and when marginal product is falling marginal cost is rising.