7.2 Cost in the Short Run >A firm's marginal cost(MC)is the additional variable cost associated with each additional unit of output. MC=△VC/△Q=△TC/△Q >Average total cost (ATC)-Firm's total cost divided by its level of output. >Average fixed cost (AFC)-Fixed cost divided by the level of output. >The average variable cost(AVC)is the total variable cost divided by the number of units of output. Copyright by CaidonghongCopyright by Caidonghong 7.2 Cost in the Short Run ➢ A firm's marginal cost(MC) is the additional variable cost associated with each additional unit of output. MC = △VC/ △Q = △TC/△Q ➢ Average total cost (ATC)-Firm’stota1 cost divided by its level of output. ➢ Average fixed cost (AFC)-Fixed cost divided by the level of output. ➢ The average variable cost(AVC)is the total variable cost divided by the number of units of output