The extra or additional cost associated with the production of an additional unit of output is the cost.

The extra or additional cost associated with the production of an additional unit of output is called marginal cost. Marginal cost is a fundamental concept in economics and production; it helps businesses determine the cost-effectiveness of scaling production.

To understand it better, marginal cost is calculated by taking the change in total cost that arises when the quantity produced is incremented by one unit. This can help firms decide whether producing an additional unit will be profitable or if the costs will outweigh the benefits.

For example, if a factory's total cost to manufacture 100 units is $1,000 and the total cost to manufacture 101 units is$1,020, then the marginal cost of producing the 101st unit would be $1,020 -$1,000 = $20. This metric is critical for optimizing production levels and pricing strategies.