Marginal Revenue Calculator for Incremental Sales Analysis
Calculate marginal revenue per additional unit from initial and final total revenue and sales quantities to assess the revenue impact of increased output.
Enter initial and final quantity and total revenue to calculate the revenue change, extra units, and marginal revenue per unit.
About marginal revenue from extra sales
A marginal revenue calculator measures how total revenue changes when you sell more units. In price theory, firms facing a downward-sloping demand curve must cut price to sell additional output, so marginal revenue sits below price. In a perfectly competitive spot market, marginal revenue equals price. The discrete estimate is the same either way: change in total revenue divided by change in quantity sold. The marginal revenue calculator subtracts initial total revenue from final total revenue and divides by extra units. Final quantity must exceed initial quantity. Going from 100 to 150 units while revenue goes from $1,000 to $1,400 produces a $400.00 revenue change, 50 extra units, and $8.00 of marginal revenue per unit. A 200-to-300 unit step with $2,000 to $2,500 revenue is $5.00 per extra unit. A 60-to-80 unit step with $600 to $840 is $12.00. If you sold the extra units without cutting the price of existing units, marginal revenue equals that price. If you had to lower the price on the whole book of business, marginal revenue is less than the new price and can even be negative when the price cut destroys more revenue than the extra units add. Negative marginal revenue is a signal to stop expanding volume at that price point. Enter totals, not prices, unless you first convert prices to total revenue (price × quantity) at each point. Keep the two observations on the same product and period definition. Mix shifts, returns, and discounts can move revenue without a clean quantity story. Currency formatting does not change the ratio. Use the marginal revenue calculator next to a marginal cost estimate. Profit on the increment is positive while marginal revenue exceeds marginal cost. When the two cross, further output no longer helps. Recalculate after a promotion or a list-price change, because the revenue slope can shift even if unit cost does not.
Marginal revenue = (final revenue − initial revenue) ÷ (final quantity − initial quantity).
Marginal revenue calculation examples
These worked examples use the same change-in-revenue over change-in-quantity formula as the marginal revenue calculator.
| Input | Output | Note |
|---|---|---|
| $1,000 to $1,400 revenue; 100 to 150 units | $8.00 | Revenue rises $400.00 over 50 extra units, so marginal revenue is $8.00 per additional unit. |
| $2,000 to $2,500 revenue; 200 to 300 units | $5.00 | A $500.00 revenue increase over 100 extra units is $5.00 of marginal revenue each. |
| $600 to $840 revenue; 60 to 80 units | $12.00 | Twenty additional units add $240.00 of revenue, or $12.00 of marginal revenue per unit. |
How to calculate marginal revenue
- Enter Initial Quantity Sold and Initial Total Revenue for the starting sales level.
- Enter Final Quantity Sold and Final Total Revenue after the extra units.
- Confirm that final quantity is higher than initial quantity.
- Select Calculate to see the revenue change, extra units, and marginal revenue per additional unit.
Marginal revenue calculator FAQ
Why is marginal revenue often below price?
If selling more requires a lower price on all units, the extra unit’s price is offset by lost revenue on the units you already would have sold. Only when you can sell extra output at an unchanged price does marginal revenue equal that price.
Can marginal revenue be negative?
Yes. If final revenue is lower than initial revenue despite higher quantity, the ratio is negative. That usually means a price cut destroyed more revenue than the extra volume added.
Should I enter price per unit instead of total revenue?
Convert first. Total revenue at each point is price times quantity. The marginal revenue calculator expects totals so that a price change across the whole volume is already in the revenue figures.
How does this relate to profit maximization?
A common rule is to expand output while marginal revenue exceeds marginal cost and to stop when they are equal. Compare the two incremental figures on the same extra units rather than comparing price with average cost.
Why must final quantity be larger than initial quantity?
The denominator is extra units sold. Zero extra units would make the ratio undefined. The calculator requires a positive quantity change so the per-unit revenue slope is defined.