What is marginal revenue?

Question

Marginal revenue is:

Answer choices

1. The change in revenue resulting from a one-unit change in sales.
2. Total revenue per unit sold.
3. Total revenue per unit produced.

Explanation

Marginal revenue measures how total revenue TR changes with the quantity sold Q:

MR = ΔTR / ΔQ.

When sales increase by one unit, marginal revenue is the additional revenue from that unit. TR/Q is average revenue, rather than marginal revenue.