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Conversion Calculator
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Enter the revenue and quantity of the products in the tool, and the calculator will compute the marginal revenue.
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Use this calculator to determine the additional revenue generated from producing one more unit of a product or service. Marginal revenue (MR) is a key microeconomic concept that helps businesses optimize pricing and production for maximum profit.
MR = ΔTR / ΔQ
Where:
Initial revenue = $5,000, final revenue = $20,000, initial quantity = 25 units, final quantity = 100 units.
This shows that each additional unit sold generates $200 in revenue. Typically, MR decreases as output increases due to the inverse relationship between price and quantity.
The marginal revenue is the change in revenue divided by the change in quantity, while the average revenue is the total revenue divided by the total number of units sold.
It helps businesses determine the revenue contribution of extra units, guiding production and pricing decisions.
The marginal revenue on a graph reflects that positive marginal revenue corresponds to elastic demand, while negative marginal revenue corresponds to inelastic demand.
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