Marginal Revenue Calculator
Find marginal revenue — the extra revenue earned from selling each additional unit — by entering total revenues and output quantities at two sales levels.
units
units
Average additional revenue from selling one more unit between the two output levels
- 1
Change in total revenue (ΔTR)
14,000 − 10,000 = 4,000 - 2
Change in quantity (ΔQ)
150 − 100 = 50 - 3
Marginal revenue
4,000 ÷ 50 = 80Average additional revenue from selling one more unit between the two levels.
How does this calculator work?
Marginal revenue = (TR₂ − TR₁) ÷ (Q₂ − Q₁). In competitive markets MR equals the market price; for price-setters MR falls below price. Profit is maximised where MR = MC. Enter total revenues and quantities at two output levels to calculate marginal revenue and average selling prices.
Formula
How this is calculated
Marginal revenue (MR) is the additional revenue a firm earns from selling one more unit of output. It is calculated as the change in total revenue divided by the change in quantity: MR = (TR₂ − TR₁) ÷ (Q₂ − Q₁). In a perfectly competitive market every unit sells at the same market price, so MR equals the price. For a monopolist or any price-setting firm facing a downward-sloping demand curve, marginal revenue falls below the average selling price because increasing sales requires cutting the price on all units sold.
The fundamental rule of profit maximisation is to produce and sell up to the point where marginal revenue equals marginal cost (MR = MC). If MR exceeds MC, selling more increases profit; if MR is below MC, reducing output increases profit. The calculator helps you identify MR between two observed sales points and compares it to the average revenue (price) at each level to diagnose whether you are in a competitive or price-setting market.
Note that marginal revenue calculated between two discrete data points is the average over the range, not the instantaneous rate. For accurate MR analysis across a wider production schedule, calculate it between many closely spaced output levels.
Frequently asked questions
A monopolist faces the entire downward-sloping market demand curve. To sell one more unit it must lower the price on all units (assuming no price discrimination), so the extra revenue from the additional unit is partially offset by the lower price received on every unit already being sold. This makes MR < price.
Compare marginal revenue to marginal cost. If MR > MC, produce more — each additional unit adds more revenue than it costs. If MR < MC, produce less — the last units cost more than they earn. Profit is maximised where MR = MC.
Yes. For a price-setting firm on the inelastic portion of the demand curve, increasing quantity requires such a large price cut that total revenue falls even as quantity rises — making MR negative. Firms rationally avoid operating in the inelastic range of demand where MR < 0.
TG we-Calculate Editorial Team. (2026). Marginal Revenue Calculator [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/marginal-revenue-calculator
TG we-Calculate Editorial Team. "Marginal Revenue Calculator." TG we-Calculate. 2026. https://we-calculate.com/calculator/marginal-revenue-calculator.
TG we-Calculate Editorial Team, "Marginal Revenue Calculator," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/marginal-revenue-calculator
@misc{wecalculate_marginal_revenue_calculator, title = {Marginal Revenue Calculator}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/marginal-revenue-calculator}}, year = {2026}, note = {TG we-Calculate} }
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