Q. 65.0( 3 Votes )

What is the relat

Answer :

Marginal revenue is the change in revenue with every additional quantity of output sold. It can be calculated with help of following formula

MR = TR_n+1 - TR_n

Where,

MR - Marginal Revenue

TR_n+1 - Total revenue on sale of (n+1) quantity of output

TR_n - Total revenue on sale of (n) quantity of output

In case of a price taking firm the market price is equal to marginal revenue. Therefore, in perfectly competitive market -

P = AR= MR

With help of following table we can understand this

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