Definition
- Marginal revenue
- Marginal revenue is the additional revenue gained from selling one more unit, the change in total revenue divided by the change in quantity.
- Not to be confused with: Total revenue
- Total revenue is the income a firm generates from selling its products, the price of the product times the quantity sold.
Test yourself
What is the difference between marginal revenue and total revenue?
Total revenue is everything the firm takes; marginal revenue is only what one more unit sold adds to it.