💰 Marginal Revenue Calculator
Calculate marginal revenue
How to Use This Calculator
Enter Change in Total Revenue
Input the change in total revenue—the difference in total revenue when selling additional units.
Enter Change in Quantity
Enter the change in quantity sold—the number of additional units sold.
Review Marginal Revenue
See the marginal revenue—the revenue from selling one additional unit. Marginal revenue helps determine optimal production levels and profit maximization.
Formula
Marginal Revenue = Change in Total Revenue / Change in Quantity
Example Calculation:
If change in total revenue is $800 and change in quantity is 10 units:
• Marginal revenue = $800 / 10 = $80 per unit
• This means selling one additional unit generates $80 in revenue
About Marginal Revenue Calculator
A marginal revenue calculator helps you calculate the revenue from selling one additional unit of a good or service. Marginal revenue is calculated by dividing the change in total revenue by the change in quantity. The concept is crucial for determining optimal production levels, pricing decisions, and profit maximization. Businesses maximize profit when marginal revenue equals marginal cost. Understanding marginal revenue helps optimize pricing and production decisions.
When to Use This Calculator
- Revenue Analysis: Analyze revenue from selling additional units.
- Pricing Decisions: Determine optimal pricing based on marginal revenue.
- Profit Maximization: Find optimal production levels (MR = MC).
- Sales Analysis: Understand revenue behavior at different sales levels.
Understanding Marginal Revenue
- Revenue per Unit: Revenue from selling one additional unit.
- Profit Maximization: Optimal production when MR = MC.
- Pricing: Helps determine if lowering price increases profit.
- Demand: Typically decreases as quantity increases (law of demand).
Why Use Our Calculator?
- ✅ Revenue Analysis: Calculate marginal revenue accurately.
- ✅ Pricing Decisions: Determine optimal pricing.
- ✅ Profit Maximization: Find optimal production levels.
- ✅ Sales Analysis: Understand revenue behavior.
- ✅ 100% Free: No registration or payment required.
Frequently Asked Questions
What is marginal revenue?
Marginal revenue is the revenue from selling one additional unit of a good or service. It is calculated as the change in total revenue divided by the change in quantity. Marginal revenue informs optimal production levels, pricing decisions, and profit maximization.
Why is marginal revenue important?
Marginal revenue matters because it supports profit maximization (produce where MR = MC), guides pricing decisions, influences production planning, and helps businesses understand how revenue changes with sales volume.
What is the relationship between marginal revenue and price?
In perfectly competitive markets, marginal revenue equals price. In monopolies or imperfect competition, marginal revenue is typically less than price because selling additional units often requires lowering the price.
How do I use marginal revenue for profit maximization?
Calculate both marginal revenue and marginal cost, then produce where MR equals MC. Increase production if MR exceeds MC and reduce production if MR falls below MC. This balance maximizes profit.