marginal revenue

marginal revenue definition - business

marginal revenue

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.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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