Alpha inc. produces 500 units of a product. the selling price of each unit is $4. the company decides sells 100 additional units. now, the total revenue earned from selling all the units is $3,000. what is the marginal revenue?

Marginal Revenue is the revenue realised by selling additional units of a product.

Mathematically, Marginal Revenue can be expressed as,

Let old Quantity be and new Quantity be  

Since 500 units were produced first,

And now 100 additional units will be produced, So

Now Change in Quantity produced is

Now we need to calculate for the  Change in Total Revenue

We also let the initial total revenue be

.

Initially 500 units were sold for $4 per unit. This implies that,

.

=$2,000

We were given the current total revenue to be $3,000.

This implies that, our change in total revenue

.

Hence our Marginal Revenue

Hence the Marginal Revenue is $10.

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