Part 2: Marginal Revenue (MR)The Dictionary of Economics Terms defines marginal revenue as:
The revenue a company gains in producing one additional unit of a good.
Since we have the figures for total revenue, we can easily calculate the marginal revenue from selling 2 goods instead of 1. It is simply:
MR(2nd good) = TR(2 goods) - TR(1 good)Here the total revenue from selling 2 goods is $10 and the total revenue from selling only one good is $5. Thus the marginal revenue from the second good is $5.
When you do this calculation, you'll note that the marginal revenue is always $5. That's because the price you sell your goods for never changes, thus in this case the marginal revenue is always equal to the unit price of $5.