what is the difference between marginal cost and average cost 
marginal cost is the expenses needed to manufacture one incremental good as a manufacturing process becomes more efficient or economies of scale are recognized the marginal cost often declines over time however there is often a point in time where it may become incrementally more expensive to produce one additional unit on the other hand the average cost is the total cost of manufacturing divided by the total units produced the average cost may be different from marginal cost as marginal cost is often not consistent from one unit to the next marginal cost is reflective of only one unit while average cost often reflects all units produced the bottom lineduring the manufacturing process a company may become more or less efficient as additional units are produced this concept of efficiency through production is reflected through marginal cost the incremental cost to produce units to maximize efficiency companies should strive to continue producing goods as long as the marginal cost is less than the marginal revenue 