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Difference between Marginal cost and Average Cost: Marginal CostMarginal cost is the change in total cost when an additional unit of output is produced.If Marginal cost (MC) is added with the total cost of pricing units we get total cost.Marginal cost (MC) = Average Fixed Cost (AFC) + Marginal Variable Cost (MVC)MC is lower than AC.MC increases faster then AC.Average CostCost per unit of output is called average cost. It’s called unit cost.Product of quality and average cost (AC) is equal to total cost.Average cost (AC) = Average Fixed Cost (AFC) + Average Variable Cost (AVC)AC is greater than MCAC increases slower then MC.
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