• Marginal Cost is the additional cost incurred from producing one more unit of a product. It represents the rate of change of total cost with respect to quantity produced.
• Average Cost is the total cost of production divided by the number of units produced. It gives the cost per unit produced over a given quantity.

Alternatively:

• Marginal cost refers to the additional cost required to produce the next unit, while average cost refers to the total cost divided by the number of units produced.