Definition of Marginal Cost

Readers Question what is the marginal cost measured at a particular level of output defined as?

Definition: Marginal cost is the change in total cost of producing one extra unit of output.

For example, suppose the cost of producing 10 bikes is £2,000. If you produce 11 bikes and the total cost increases to  £2,150.

This means the marginal cost of the 11th bike is £150. (Note, the marginal cost is less than the average cost of the first 10 bikes)

See: Diagram of marginal cost