calculation showing the change in total cost as a result of a change in volume. For example, if one more unit of output causes an increase in total cost of $40, the $40 is the marginal cost. It is useful to calculate marginal cost to determine whether the rate of production should be changed. In general, as activity increases, economies of scale (learning curve principle) set in because of greater experience and manufacturing efficiency. Eventually, however, a point is reached where diseconomies of scale (e.g., increased management supervision) occur, causing marginal costs to rise. When a company is at an optimum output level, marginal cost coincides with average total unit cost. The marginal cost curve is usually shown as a U-shape on a graph.