How to Calculate Marginal Revenue
Calculate marginal revenue (MR) from changes in total revenue: MR = ΔTR / ΔQ. Process: enter two total-revenue/quantity pairs (or a small ΔQ), compute the ratio, and interpret results for pricing decisions. Example: use TR at Q and Q+1 to estimate MR.
How to Calculate Marginal Revenue
What: Marginal revenue is the additional revenue from selling one more unit, computed as the change in total revenue over the change in quantity. Usage: provide two (Q, TR) pairs or successive totals and click calculate. Scenarios: microeconomic analysis, pricing strategy, and profit-maximization.
Example: Q1=100, TR1=2000; Q2=101, TR2=2015 → MR = (2015 - 2000) / (101 - 100) = 15.
Frequently asked questions
What is marginal revenue?
Marginal revenue (MR) is the change in total revenue from selling one additional unit: MR = ΔTR / ΔQ.
Why can MR fall as quantity rises?
In imperfect competition, lowering price to sell more units reduces revenue on previous units, so MR often declines with output.
How should I choose ΔQ?
Use the smallest practical quantity step in your data (often 1 unit). Larger steps approximate average MR over an interval.
Important notice
This calculator is for learning microeconomics concepts. It is not business, pricing, or investment advice.
References: Introductory microeconomics definition: marginal revenue as the derivative/ratio of total revenue to quantity.