Marginal revenue is the incremental gain produced by selling an additional unit. It follows the law of diminishing returns, eroding as output levels increase.

The demand function The first step in the process of coming up with a marginal revenue derivative is to estimate the demand function.

Written by How to Calculate a Marginal Revenue Derivative for The Motley Fool -> One key decision every business has to make is how much of its goods or services to make available to customers.

Calculate marginal revenue by dividing the added revenue from that one extra sale by the change in quantity sold.