marginal revenue(redirected from Marginal Revenues)
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The change in total revenue as a result of producing one additional unit of output.
The revenue that a company generates over what it previously generated for each additional unit of output. For example, suppose a company generates $1000 in revenue from 100 units of a product (in other words $10 per unit). In order to sell 101 units it may have to reduce its price to $9.99 per unit. In this case, its revenue becomes $1008.99. Thus, the marginal revenue is $8.99.
The extra revenue generated by selling one additional unit of a good or service. For example, if a firm can sell 10 units of a product at a price of $25 per unit, total revenue is $250. If, in order to sell 11 units, it must reduce the price to $24, total revenue rises to 11 × $24, or $264. Thus, the marginal revenue of the 11th unit is $264 - $250, or $14.