For a firm in perfect competition marginal revenue equals price. A firm facing a downward-sloping demand curve must cut price to sell more, so marginal revenue is below price.
How to use the Marginal Revenue Calculator
- Initial price
- Initial quantity
- New price
- New quantity
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the price and quantity before and after the change.
Inputs explained
| Field | What to enter |
|---|---|
| Initial price | Amount in your currency |
| Initial quantity | A number |
| New price | Amount in your currency |
| New quantity | A number |
What each result means
- Initial total revenue = [Initial price]×[Initial quantity]
- New total revenue = [New price]×[New quantity]
- Marginal revenue = ([New total revenue] – [Initial total revenue])÷([New quantity] – [Initial quantity])
Example values
How the main result changes when Initial price changes and everything else stays at the example values above:
| Initial price | Marginal revenue |
|---|---|
| 10 | 109 |
| 15 | 59 |
| 20 | 9 |
| 25 | -41 |
| 30 | -91 |
| 40 | -191 |
Formula
Total revenue = price × quantity
Marginal revenue = (new revenue − old revenue) ÷ (new quantity − old quantity)
Worked example
Inputs: Initial price: $20; Initial quantity: 1,000; New price: $19; New quantity: 1,100.
Results: Initial total revenue = $20,000.00; New total revenue = $20,900.00; Marginal revenue = $9.00.
Frequently asked questions
What is marginal revenue?
The extra revenue from selling one more unit.
Why is marginal revenue less than price for a monopoly?
Selling more requires lowering the price on all units.
Can marginal revenue be negative?
Yes, when demand is inelastic and a price cut lowers total revenue.