cost by the change in quantity. The formula for marginal cost is:

Ordinarily, marginal cost changes as the firm produces a greater quantity.

In the raspberry farm example, in Figure 8.3 and Table 8.3, marginal cost at first declines as production

increases from 10 to 20 to 30 to 40 packs of raspberries—which represents the area of increasing marginal

returns that is not uncommon at low levels of production. At some point, though, marginal costs start to

increase, displaying the typical pattern of diminishing marginal returns. If the firm is producing at a quantity

where MR > MC, like 40 or 50 packs of raspberries, then it can increase profit by increasing output because the

marginal revenue is exceeding the marginal cost. If the firm is producing at a quantity where MC > MR, like 90

or 100 packs, then it can increase profit by reducing output because the reductions in marginal cost will
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