**Difference between Marginal cost and Average Cost:**

**Marginal Cost**

- Marginal 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 Cost**

- Cost 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 MC
- AC increases slower then MC.