The first tool required for the monopoly analysis of value is a pair of curves, marginal and average. The conceptions of average and marginal value can be applied to costs of production, utility, revenue, the productivity of factors of productions, and so forth. In the present chapter we shall for purposes of illustration call the quantities under discussion cost and output, but the discussion can be applied equally to any other two quantities of which one is determined by the value of the other. Marginal cost represents the rate at which total cost increases as output increases; thus the marginal cost of n units of output is the total cost of n minus the total cost of (n–1). Average cost is the total cost of n units of output divided by n. It is therefore possible, if the average costs of any two successive amounts of output are known, to calculate the marginal cost.