Marginal Revenue Government Definition

Marginal revenue is the additional income generated from the sale of one more unit of a good or service.

Marginal revenue government definition. Marginal revenue is an economic metric defined as the increase in a company s gross revenue from selling one additional unit of its product. It follows the law of diminishing returns eroding as output levels increase. Marginal revenue definition. From the above example the marginal ratio seems to ba a simple ratio.

It can be calculated by comparing the total revenue generated from a given number of sales e g. 11 units and the total revenue generated from selling one extra unit i e. It can be more easily defined as the variation of the revenue figure after one more unit is sold. 49 15 049 15 000 1.

If micky produce 1 extra unit then marginal revenue calculated as. Marginal revenue mr is the incremental gain produced by selling an additional unit. Marginal revenue or marginal benefit is a central concept in microeconomics that describes the additional total revenue generated by increasing product sales by 1 unit.