Question

How is MC derived from TVC?

Answer 1

Marginal Cost (MC) is derived from Total Variable Cost (TVC) by calculating the change in TVC when one more unit of output is produced. 

`"MC" = (Delta "TVC")/(Delta "Q")`

Since output (Q) usually increases by 1 unit, the formula becomes:

MC = TVC_n ​− TVC_{n − 1}​