Marginal Revenue is the difference between present total revenue and the previous total revenue. It is an addition made to the total revenue.

Marginal Revenue is the additional revenue made to the total revenue from the sale of one more unit of a good.

When the sale increase from 2 units to 3 units. The TR increases from $.36 to $.48. The additional revenue made to the total revenue is $.12. MR of the 3rd unit is $.12.

The Formula to calculate MR is -

##MR_n =TR_n -TR_(n-1)## ##MR_3 =TR_3 -TR_(3-1)## ##MR_3 =TR_3 -TR_2## ##MR_3 =48 -36=12##

There is another formula also -

##MR =( Delta(TR))/(DeltaQ)##

When the sales moves from 4 units to 5 units ##DeltaQ = 1##, and ##Delta TR= (60-56) = 4##

MR of the 5th unit is ##MR =4/1=4##

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