Marginal cost

Japanese: 限界費用 - げんかいひよう

The increase in production costs when production volume is increased by one additional unit. Since fixed costs do not change in the short run, marginal cost is equal to the increase in raw material costs and wages, in other words, marginal variable cost. In contrast, the value obtained by dividing total cost by production volume is called average cost. When the amount of production already produced is small, marginal cost decreases gradually, but once production volume increases to a certain extent, it forms a U-shaped curve in which marginal cost also increases gradually. Profits are maximized when marginal cost and marginal revenue (the additional amount of total revenue when sales volume is increased by one more unit) are equal. If the two are not equal, it is possible to increase profits or reduce losses by increasing or decreasing production volume. It is also said that when marginal cost and marginal utility are equal, the satisfaction (welfare) of society as a whole is maximized.
→ Related item marginal analysis

Source : Heibonsha Encyclopedia About MyPedia Information

Japanese:

生産量を追加的に１単位増加したときの生産費用の増加分。短期的には固定費は変わらないから，限界費用は原材料費や賃金分の増加，つまり限界可変費用に一致する。これに対し，総費用を生産量で割った値を平均費用という。すでに生産している生産量が小さいときには限界費用は逓減するが，生産量がある程度増えると，限界費用も逓増するというU字のカーブを描く。限界費用と限界収入（販売量をもう１単位増加したときの総収入の追加分）が等しいとき利潤が最大化する。両者が等しくない場合は，生産量の増減によって，利潤の増加あるいは損失の減少をはかることができる。また限界費用と限界効用が等しくなるとき，社会全体の満足（厚生）が最大となる，とされる。
→関連項目限界分析

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