If C(x) is a manufacturer's cost function -- the cost of production x item -- then the first derivative C'(x) gives the marginal cost, that is, the cost per additional item of a small increase in production. The second derivative C''(x) gives the rate of increase of marginal cost with respect to an increase in production. We shall have more to say on the interpretation of this quantity in the next chapter,but meanwhile the following example will illustrate certain aspects of its significance.