Question

Choose the correct alternative from given options:

Which of the following formula is correct for calculating marginal cost?

Options

• MC_N = TFC_n – TFC_{N – 1}

• MC_N = AC_N – AC_{N – 1}

• MC_N = AVC_N – AVC_{n – 1}

• MC_N = TC_n – TC_{N – 1}

Answer 1

The correct formula of calculating marginal cost is MC_n = TC_n – TC_{n – 1}.

Hence, the correct answer is option MC_N = TC_n – TC_{N – 1}.