A company produces 100 units of a product at a total cost of $400. If the total cost to produce 101 units is $404, how would you classify this change in cost?

The change in cost when a company produces one more unit is called the marginal cost. In this case, the total cost to produce 100 units is $400, and the cost to produce 101 units is $404. To find the marginal cost, we subtract the cost of 100 units from the cost of 101 units, which is $404 minus $400, giving us $4. This means the marginal cost of producing one additional unit is $4. So, we can classify this change in cost as the marginal cost of production, which helps businesses understand how much it costs to produce each extra unit.