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Marginal cost refers to an increase or decrease in the production cost if the output is increased by one more unit. The variable cost formula is used to get the marginal cost as per the changes in costs or the change in quantity.
If the price one charges for a unit is greater than the marginal cost of producing one more unit, then one should produce it. The variable cost that comes by increasing or decreasing the cost by one unit helps to identify the cost of production and evaluate how to produce more units cost-effectively.
Marginal revenue is the amount one could gain from selling one more unit. If the marginal revenue is more than the marginal cost, it would mean selling can be profitable.
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