How to figure out marginal revenue?
Understand the Problem
The question is asking how to calculate marginal revenue, which involves understanding how revenue changes with the sale of an additional unit of a good or service.
Answer
Marginal revenue is calculated by dividing the change in total revenue (ΔTR) by the change in quantity sold (ΔQ). The formula is MR = ΔTR / ΔQ.
The final answer is the marginal revenue is calculated by dividing the change in total revenue (ΔTR) by the change in quantity sold (ΔQ). The formula is MR = ΔTR / ΔQ.
Answer for screen readers
The final answer is the marginal revenue is calculated by dividing the change in total revenue (ΔTR) by the change in quantity sold (ΔQ). The formula is MR = ΔTR / ΔQ.
More Information
Marginal revenue helps companies understand how much additional income they earn from selling one more unit of a product. This information is crucial for making pricing and production decisions.
Tips
Common mistakes include not accurately computing the change in total revenue or the change in quantity sold. Ensure you use the correct figures for initial and final values.
Sources
- Marginal Revenue Explained, With Formula and Example - investopedia.com
- Learn How to Calculate Marginal Revenue - corporatefinanceinstitute.com
- How To Calculate Marginal Revenue (Formula and Examples) - indeed.com
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