How to calculate incremental cost?

Understand the Problem

The question is asking for a method or formula to calculate incremental cost, which is the additional cost incurred when producing one more unit of a good or service.

Answer

The total cost of the increased production level minus the total cost of the base production level.

The incremental cost formula involves subtracting the total cost of producing the base level of units from the total cost of producing the increased level of units.

Answer for screen readers

The incremental cost formula involves subtracting the total cost of producing the base level of units from the total cost of producing the increased level of units.

More Information

Incremental cost is crucial for decision-making in business, helping determine the cost difference when increasing production levels.

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