A preliminary analysis of the process or material is con-. ducted to determine the feasibility of introducing a new. or changing a material/process technology. This analy-. sis includes a benchmark assessment of available and. competing technologies.
Marginal Cost(2 to 3) = Total Cost of Producing 3 â Total Cost of Producing 2. Looking at our data, it costs 600 to produce three goods and 390 to produce two goods. The difference between the two figures is 210, so that is our marginal cost.
Marginal cost and average cost can differ greatly. For example, suppose it costs $1000 to produce 100 units and $1020 to produce 101 units. The average cost per unit is $10, but the marginal cost of the 101st unit is $20.