If x is the number of units of a product produced in some time interval, then:
| total cost | = C(x) |
| marginal cost | = C'(x) |
| total revenue | = R(x) |
| marginal revenue | = R'(x) |
| total profit | = P(x) = R(x) - C(x) |
| marginal profit | = P'(x) = R'(x) - C'(x) |
Drag the x slider to see how cost, revenue, and profit change with the number of units produced.
If C(x) is the total cost of producing x items, then the exact cost of producing the (x + 1)st item is:
C(x + 1) - C(x)The marginal cost function approximates the exact cost of producing the (x + 1)st item:
C'(x) ≈ C(x + 1) - C(x)
Similar statements can be made for total revenue functions and total profit functions.
If x is the number of units of a product produced in some time interval, then:
| average cost | = C(x) | = C(x)/x |
| marginal average cost | = C'(x) | = d/dx C(x) |
| average revenue | = R(x) | = R(x)/x |
| marginal average revenue | = R'(x) | = d/dx R(x) |
| average profit | = P(x) | = P(x)/x |
| marginal average profit | = P'(x) | = d/dx P(x) |