Marginal Revenue


Marginal revenue can be defined as the extra revenue earned by selling one extra unit of product. It’s beneficial for a company as the profit margin increases with same marginal cost. It would be profitable, as long as the rate of marginal revenue remains higher.

But if the company continues to produce more units in order to achieve higher marginal revenue then at some point this marginal revenue start to slows down.

How to calculate marginal revenue= All revenue – Original Revenue / All products sold – current products sold

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