The formula for the marginal cost is quite simple:

`MC = ΔTC/ΔQ`

where:

MC - marginal cost;

ΔTC - change in the total cost; and

ΔQ - change in the total quantity.

For example, imagine that your company produces chairs. Every month there are new 10,000 chairs created, which costs the company a total of $5,000. You may wonder how much it would cost to produce an additional 2,000 chairs, and, if so, you should use the marginal cost calculator. If 12,000 chairs costs $5,500, input this data into the marginal cost formula from above:

`MC = ΔTC/ΔQ = (5,500 - 5,000) / (12,000 - 10,000) = 500 / 2,000 = $0.25`

What the tells us is that it costs your company $0.25 to produce chair number 12,000. You may wonder why this final chair costs less than than the cost per unit for 10,000 chairs. To understand this, you should learn more about economies of scale.