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Marginal revenue (MR)


The revenue a company generates out of every next unit purchased on the market.
Since Total Revenue (TR) is equal to all units sold (x) multiplied by the price of each unit (p), i.e. TR = x . p, Marginal Revenue (MR) is equal to the difference in total revenue (TR) divided by the difference in unit quantities (UQ), i.e. MR = ( TR2 - TR1 ) : ( UQ2 - UQ1 )
Companies keep an item into production until the revenue out of selling every other product exceeds the additional costs for it.