Marginal revenue
Marginal revenue (MR) is the additional revenue received from selling one additional unit of output, calculated as Change in Total Revenue ÷ Change in Quantity (ΔTR ÷ ΔQ). MR is the gradient of the total revenue curve.
Real World
When Ryanair cuts fares to fill extra seats, the marginal revenue from each additional passenger is less than the ticket price because the lower fare applies to all seats, not just the last one sold.
Exam Focus
Draw the MR curve exactly twice as steep as a linear AR curve — examiners penalise inaccurate diagram positioning.
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