Business owners, managers, aspiring entrepreneurs form business organization selec t-based considerations, including taxes, liability, capital contributions, sharing profits losses, management control, survivorship.

Marginal cost and marginal revenue

Marginal revenue

The concept of marginal revenue is generically understood as the additional revenue the company generates from the sale of one more unit of its product or service. In a different formulation, the marginal revenue represents the money generated by the sale of the last item, be it product or service.

The marginal revenue is computed through the division of the change in total revenue by the change in quantity of sold items. This computation method also represents the relationship between the marginal revenue and the total revenue.

MR = Change in TR / Change in Q, where

MR is the marginal revenue

TR represents the total revenues, and Q. represents the quantity of items sold (Economics. Fundamental Finance).

Marginal cost

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