The net change in total cost that results from very small changes in specific variables, such as producing one additional unit of product.

An example of marginal cost would be:

Total cost of producing 10,000 units is £50,000. If a total of 10,001 units were then produced the total cost would be £50,002. This results in a marginal cost—the cost of producing the next unit—was £2.

See also:
Supply Chain