Marginal Revenue Calculator
Calculate revenue from selling one additional unit for optimal pricing and profit maximization
Calculate Marginal Revenue
The difference between new total revenue and previous total revenue
The difference between new quantity sold and previous quantity sold
Marginal Revenue Results
Formula used: MR = ΔTR ÷ ΔQ
Calculation: $0.00 ÷ 0 units = $0.00
Pricing Decision Analysis
Example Calculation
Magic 8 Ball Production Example
Initial Production: 1,000 units
Initial Revenue: $50,000
New Production: 1,200 units
New Revenue: $62,000
Change in Revenue: $12,000
Change in Quantity: 200 units
Calculation
MR = ΔTR ÷ ΔQ
MR = $12,000 ÷ 200
MR = $60 per unit
Each additional unit generates $60 in revenue
Key Revenue Concepts
Marginal Revenue
Revenue from selling one additional unit
Total Revenue
Price × Quantity sold
Average Revenue
Total Revenue ÷ Quantity
Price
Amount charged per unit
Pricing Strategy Tips
Compare marginal revenue with marginal cost
Higher MR indicates pricing power
Negative MR suggests market saturation
Use for optimal production quantity decisions
Understanding Marginal Revenue
What is Marginal Revenue?
Marginal revenue is the additional revenue generated from selling one more unit of a product or service. It's a crucial metric for pricing decisions and determining the optimal level of production for profit maximization.
Why is it Important?
- •Helps determine optimal pricing strategies
- •Identifies profit maximization points
- •Guides production quantity decisions
- •Evaluates market demand elasticity
Formula Explanation
MR = ΔTR ÷ ΔQ
- MR: Marginal Revenue
- ΔTR: Change in Total Revenue
- ΔQ: Change in Quantity Sold
Profit Maximization Rule: Continue production as long as marginal revenue equals marginal cost (MR = MC)
Marginal Revenue in Different Markets
Perfect Competition
MR = Price (constant). Firms are price takers and can sell any quantity at market price.
Monopoly/Monopolistic Competition
MR < Price (decreasing). Firms must lower prices to sell additional units, reducing marginal revenue.