Question

What is marginal revenue? Write its formula.

Answer 1

Explanation:

Marginal revenue is the net additional made to the total revenue by selling an extra unit of the commodity

It can be calculated as

MR = change in total revenue/ change in total no. of units

Answer 2

Marginal revenue is the additional revenue that is produced when a product increases

The formula of Marginal revenue is equal to change in revenue divided by change in the quantity of output.

What are the characteristics of Marginal revenue?

• It requires maximum profit which is equal to the marginal cost.
• Marginal revenue takes its own decision whether it is a product of a company or the suppliers
• It new products have all types of products which are necessary for the company
• It determines the price of the product and its monopoly conditions
• It extends its market through local distributors