Greeting, here's the good news, the good news is we're almost done with our exercises and figuring out cost curves. That's one piece of good news. The second piece of good news is this last cost curve we're going to introduce is actually the most important one, okay? So we saved the best for last, that doesn't mean that it's getting any easier but it's really an important cost for what's going to happen for the rest of this course. In n fact, hopefully for the rest of your life as you think about reading stories in a newspaper about what this regulation has done to this firms. You're going to think a lot about this term, marginal cost. So marginal cost is the last cost curve we want to think about. Earlier in this course when we talked about something called the law of diminishing marginal product. I pointed out to you that the word marginal, anytime you see the word marginal, economist use the word marginal to mean change in, okay? So the law of diminishing marginal product was a law of diminishing change in product. And in this case the marginal cost is the change in cost, okay? So we're going to write this out, that marginal cost is the change in total cost for any change in output no variables, no jargon in there at all, okay? So let's see what this really looks like, so we can say, by the way from now on we're just going to call this MC. I'm not going to keep riding out marginal cost, okay? MC is our is our marginal cost and marginal cost, then formally is equal to the change in total cost for a change in output. Thus the calculus form is d of tc over d of 2, all right? D means the derivative of total cost over the derivative of output or if you don't like that you can say, I know what that means Larry, that means the change in total cost divided by the change in output. You can also say if you don't like that too much we can call it I, it's the slope of the total cost function. All three of those are correct answers to what marginal cost means. Remember, economists use the word marginal to think about change. That's exactly what this term is, only it's written in terms of calculus. That's exactly what we did here just kind of writing out and lay terms or this is what we know about marginal cost is indeed the slope of the total cost function. Now, it's really important to us to understand marginal cost because, and by the way, some of you probably talked about marginal cost in your business. The jobs you work in, job sites typically refer to marginal cost as incremental cost. So you see in fact even sometimes the Wall Street Journal will jump and some of their stories between talking about marginal costs in New Orleans three to incremental cost in New Orleans industry. They're really the same thing incremental cost, they're really talking about how much extra does it cost me to make one more unit. Think of it that way, see out there that craft plan on the edge of town, they got jars of mayonnaise that they're making, they're making jars of mayonnaise. And if they want to make one more jar of mayonnaise, they don't have to change any of their fixed costs, they don't have to change anything about the assembly lines. All they have to do is there's some cost involved with a couple more eggs because it usually about two eggs in a jar of mayonnaise. There's a little milk in there, there's a glass jar, there's a label, there's some workers time. And the sum of all those little incremental costs would be called the marginal cost of that extra jar of output. That's really important to us because in the bottom line when we get into profit maximization, which will be the next module. When you get in the profit maximization the firm is thinking about, I know how much it cost to make just this extra jar. I know exactly how much it costs to make it, that's the marginal cost. I know exactly what people are giving me, that's the marginal revenue. Where should I stop? What's the right amount to produce? Okay, thanks.