Revenue & Sales
Intermediate

Marginal Revenue

Marginal revenue is the extra revenue earned from selling one additional unit.

Formula

MR=ΔTRΔQMR = \dfrac{\Delta TR}{\Delta Q}

Variables

MRMarginal revenue
\Delta TRChange in total revenue
\Delta QChange in quantity

Example

Revenue rises $180 when sales rise 10 units: MR = $18

Did You Know?

Profit is maximised where marginal revenue equals marginal cost — a cornerstone of microeconomics.

revenuemarginaleconomics

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Total Revenue

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Total revenue is the selling price multiplied by the number of units sold.

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Net revenue is gross revenue less returns, refunds and discounts — the amount actually recognised.

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Average revenue is total revenue divided by units sold — equal to price per unit in a single-price market.

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The percentage change in revenue from one period to the next.

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Monthly recurring revenue is the number of active subscribers times average revenue per user per month.

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Annual recurring revenue annualises the monthly recurring revenue of a subscription business.