Marginal cost calculator

Marginal cost helps businesses make informed pricing decisions. By knowing the additional cost incurred to produce one more unit, a company can set prices that cover both variable costs and contribute towards fixed costs and desired profit margins.

$
.00
units

This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.

Your result

Marginal cost

$-

Get a quote

How to calculate marginal cost

To calculate the marginal cost, you’ll need information about the change in total cost and the change in quantity produced. Here’s how you can calculate the marginal cost:

  1. Determine the initial total cost: Identify the total cost of production for a specific quantity.

  2. Determine the final total cost: Identify the total cost of production for a different quantity, which is greater than the initial quantity.

  3. Calculate the change in total cost: Subtract the initial total cost from the final total cost. This represents the change in cost.

    Change in Total Cost = Final Total Cost – Initial Total Cost

  4. Calculate the change in quantity: Determine the difference between the final quantity produced and the initial quantity.

    Change in Quantity = Final Quantity – Initial Quantity

  5. Calculate the marginal cost: Divide the change in total cost by the change in quantity.

    Marginal Cost = Change in Total Cost / Change in Quantity

By performing these calculations, you’ll obtain the marginal cost, which represents the additional cost incurred to produce one additional unit of output.

Please note that the concept of marginal cost is applicable in the short run, where some costs may vary with the level of production while others remain fixed.

Ready to grow your business?

Clever finance tips and the latest news

Delivered to your inbox monthly

Join the 95,000+ businesses just like yours getting the Swoop newsletter.

Free. No spam. Opt out whenever you like.

Our offices:

Disclaimer: Swoop Finance Pty Ltd (ABN 52 644 513 333) helps Australian firms access business finance, working directly with firms and their trusted advisors. We are a credit broker and do not provide finance products ourselves. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Swoop Finance Pty Ltd can introduce applicants to a number of providers based on the applicants’ circumstances and creditworthiness, we may receive a commission or finder’s fee for effecting such introductions. Swoop Finance Pty Ltd does not provide any kind of advice and in giving you information about providers products, we are not making any suggestion or recommendation to you about a particular product. Offers of finance are subject to a separate assessment process by the provider and subject to their terms and conditions. If you feel you have a complaint, please read our complaints section which is contained within our terms and conditions.

© Swoop 2025

Looks like you're in . Go to our site to find relevant products for your country. Go to Swoop