Which of the following best describes marginal revenue?
A)How sales revenue varies as a function of how much product is sold
B)The incremental sales from producing one more unit of output
C)Rate of change in total revenue that results from the sale of ΔQ additional units of output
D)The total sales for a given product based on plant output
E)Percentage change in quantity divided by percentage change in price

Question

Quizplus · Accepted Answer

Marginal revenue is the rate of change in total revenue that results from the sale of ΔQ additional units of output. It is calculated by dividing the change in total revenue by the change in output. It is important for firms to understand marginal revenue as it helps them make pricing and production decisions.

Which of the Following Best Describes Marginal Revenue