marginal revenue


The revenue associated with one additional unit of production. Whether this is higher, lower or the same as the revenue from the previous unit of production depends on the demand for the producer's product. In the case of a producer who supplies a very small percentage of the market, an extra unit of production is unlikely to have an effect on market prices. In this case, increased production will not affect marginal revenue. On the other hand, if the producers supplies most or all of the market (such as in a monopoly or near-monopoly), then increased production is likely to reduce marginal revenue.

Use marginal revenue in a sentence

Before the quarter closed, my boss walked up and down the rows of the factory encouraging employees to work harder because each sale meant more marginal revenue for the company.

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I had to figure out the marginal revenue and I knew it would take me a bit of time to figure out every part of it.

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marginal rate of transformation marginal profit